• DXY leaves behind two consecutive sessions with losses.
• Extra losses look likely on a breakdown of the 104.00 zone.

DXY regains some composure and prints decent gains near 104.70 on Tuesday.

So far, the continuation of the range bound theme seems the most likely scenario in the very near term for the index. In the meantime, the dollar needs to clear the February peak at 105.35 (February 27) to allow for extra recovery and a potential challenge of the 2023 top at 105.63 (January 6).

On the downside, the loss of the 104.00 region should likely spark a deeper pullback to, initially, the 55-day SMA, today at 103.45.

In the longer run, while below the 200-day SMA at 106.56, the outlook for the index remains negative.

DXY daily chart