• The index starts the new year in an erratic fashion.
• The multi-month low at 103.39 emerges as the next support.

DXY gives away most of Tuesday’s strong advance to the boundaries of the 105.00 hurdle and returns to the sub-104.00 region on Wednesday.

The index appears to have moved into a consolidative phase, although the outlook remains tilted to the downside while it remains below the key 200-day SMA at 106.25.

A deeper pullback could revisit the multi-month low at 103.39 (December 30). The loss of this region could leave the dollar vulnerable to further losses in the short-term horizon.

DXY daily chart