The US dollar index (DXY) is holding onto the latest advance well above the 100.50 barrier, as bulls keep their sight on the previous week’s high of 100.76.
The buying interest around the dollar gauge remains unabated amid the uncertainty over the Ukraine crisis and China’s covid lockdowns, which are disrupting supply chains and sending inflation through the roof via surging commodities prices.
This, in turn, flags risks of a global recession, directing the risk-off flows into the safe haven buck. Additionally, rallying US Treasury yields on the hawkish Fed’s outlook and commentary add to the upside in the dollar.
Technically, the index has more room to rise and could briefly recapture the 101.00 after the price yielded an upside break from the rectangle pattern on April 5.
The bullish confirmation triggered a fresh uptrend in the DXY, with the pattern target now seen at 101.08. Ahead of that, bulls need to take out Thursday’s high.
The 14-day Relative Strength Index (RSI) looks north well above the midline, backing the bullish case.
On the flip side, the 100.50 level will be the initial demand area, below which sellers will accelerate control towards the April 12 highs of 100.33.
The dollar bears would then look to test the 100 psychological mark.
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