The US Dollar Index (DXY) is trading near 102.144, the lowest since April 26. A break under 101.08 would open up additional losses below 100 but the dollar is set to resume its uptrend eventually, economists at BBH report.

Pendulum of market sentiment is likely to swing back in the dollar’s favor

“Key level to watch is 101.80 as a break below would set up a test of the April 21 low near 99.818.”

“We still view this as a correction within the longer-term dollar rally but confess surprise at how far the dollar has fallen from the early May peak.”

“At some point, the pendulum of market sentiment is likely to swing back in the dollar’s favor but for now, the market is seeing very little resistance as it takes the dollar lower.”

“We believe that as the US outlook improves, yields will resume rising and that should help the dollar get some traction in the coming days.”