Dollar index is flirting with the 21-month high of 98.14 after the rebound off the uptrend line in the previous days. The RSI is approaching the 70 region, while the stochastic is ready to cross the 80 level, both are suggesting that the next move may be to the downside rather than to the upside as the indicators reached their overbought levels.
If the price retreats the next immediate support could come from the 97.40 zone. Even lower, the 20-day simple moving average (SMA) at 96.33 ahead of the 23.6% Fibonacci retracement level of the up leg from 89.50 to 98.14 at 96.12. Steeper declines below the descending trend line may open the door for the 95.10 barrier.
On the other hand, a successful climb beyond the 21-month high of 98.14 may drive traders until the 98.75 inside swing low from April 2020 and the 101.00 round number.
All in all, the index has been in a strong positive tendency since May 2021 and only a drop beneath the ascending trend line and the 200-day SMA at 94.00 may change this outlook.
