- DXY is under pressure after hitting new cycle highs.
- Overbought conditions should trigger a technical move.
The US Dollar Index (DXY) rose to new almost 20-year highs around 108.60 on Tuesday, though lost some ground afterwards.
The dollar continues to rise on the short-term horizon, with the next target at the October 2002 high at 108.74. However, overbought conditions could trigger a technical correction to initially the post-FOMC June high at 105.78 (June 15).
As long as the index trades above the 5-month line around 103.00, the short-term outlook for DXY should remain constructive.
Also, the broader bullish view remains intact as long as it is above the 200 SMA at 98.59.
DXY day chart
Source: Fx Street
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