DXY index, which measures the US dollar's performance against a basket of six major currencies, managed to regain some balance on Thursday, bouncing back from an earlier retracement to the 102.00 neighbourhood.
Despite the modest recovery, the index is still facing a broader bearish stance, with analysts predicting a potential visit to the 2023 low around 100.80 (February 2) if it drops below the monthly low at 101.91 (March 23).
While the DXY's recent bounce is encouraging, the outlook for the index remains negative as long as it stays below the 200-day SMA at 106.55. This key technical level has been a major resistance for the index over the past few months, and a sustained move above it would be required to shift the current bearish bias.
Investors are closely watching the US Federal Reserve's monetary policy decisions and economic data releases for any signals on the future direction of the dollar. With global central banks continuing to pursue accommodative policies, the greenback's value could remain under pressure in the near term.
In summary, while the DXY has managed to bounce back from its recent retracement, the broader outlook remains bearish, with potential downside risks looming. Investors should remain cautious and closely monitor key technical levels and economic indicators to gauge the dollar's future direction.
DXY Daily Chart
