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  • The dollar index (DXY) jumped to 96.85 in Asia – the highest level since June 27, 2017.
  • The previous day’s big bullish outside-day candle has bolstered the already bullish technical setup.

The US dollar exchange rate, as represented by the dollar index (DXY), clocked a 14-month high of 96.85 in Asia.

The index created a largely bullish outside-day candle on Tuesday, validating the already bullish technical setup: break above the 100-week and 200-week moving average last week, upward sloping 5-day and 10-day moving averages (MAs).

As a result, the DXY looks set to test 97.87 (June 2017 high + 61.8 percent retracement of 2017-2018 drop).

More importantly, the rally to 97.87 could happen in the next 24 hours if the US retail sales, due today at 12:30 GMT, prints above the estimate of 0.1 percent month-on-month.

Dollar Index Technical Levels

Resistance: 97.00 (psychological hurdle), 97.87 (June 2017 high + 61.8 percent retracement of 2017-2018 drop), 98.50 (May 8 low)

Support: 96.35 (5-day moving average), 95.77 (10-day moving average), 95.16 (previous day’s low)