US Dollar Index Price Analysis: Potential corrective downside in the pipeline

DXY faces some selling pressure and recedes to the 98.90/85 band, where some initial contention turned up so far on Tuesday.

In light of the recent price action, further gains remain likely for the time being. That said, the next hurdle aligns at the 99.97 level (May 25 2020 high) closely followed by the psychological 100.00 mark. However, the continuation of the leg lower should not be ruled out following the current overbought condition of the index.

The current bullish stance in the index remains supported by the 5-month line, today near 95.70, while the longer-term outlook for the dollar is seen constructive while above the 200-day SMA at 94.17.

DXY daily chart