• DXY adds to Monday’s pullback and retreats to the low-108.00s.
• The downside appears limited by the 107.60 zone (August 26).

DXY keeps correcting lower following Monday’s rejection from fresh cycle highs around 109.50.

The index seems to have moved into a consolidative phase, with the lower bound in recent lows near 107.60 (August 26 low). On the other hand, the surpass of the 2022 high at 109.47 (August 29) could encourage the dollar to revisit the September 2002 top at 109.77 ahead of the round level at 110.00.

In the meantime, while above the 6-month support line around 105.40, DXY is expected to keep the short-term positive stance.

Looking at the long-term scenario, the bullish view in the dollar remains in place while above the 200-day SMA at 100.80.

DXY daily chart