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  • US Dollar Index (DXY) stalls decline, not out of the woods yet.
  • Bears need a sustained break below September lows of 91.75.
  • Easing US election uncertainty boosts risk, downs the dollar.

The bears are taking a breather in early Europe following the sharp sell-off seen last week, as the US dollar index (DXY) trades modestly flat at 92.20.

Despite the pullback, the spot remains within a striking distance of two-month lows of 92.13 reached earlier in the Asian session.

With Joe Biden called the 46th US President, markets are expecting the uncertainty around the election to ease while predicting additional stimulus, both of which are boding ill for the safe-haven US dollar.

From a near-term technical perspective, the DXY is likely to face immediate resistance at the bearish 21-hourly moving average (HMA) of 92.29 on its road to recovery.

If the bulls manage to recapture the latter, the next upward barrier is seen at the crucial horizontal support now resistance at 92.49. Further north,  the 50-HMA at 92.61 could act as a strong barrier.

The latest leg higher is backed by the fresh uptick in the Relative Strength Index (RSI), which inches higher at 40.41, having bounced-off the oversold territory.

To the downside, a break below the 92.00 level could open floors towards the September low of 91.75.

The selling pressure is likely to accelerate below the latter, with the 1.5-months old falling trendline support at 91.55 back on the sellers’ radars.

DXY hourly chart