Bank of America Merrill Lynch Research discusses the USD Index (DXY) technical outlook and flags a scope of forming a double-top formation around current levels.
"If a double top is forming then the risk for the DXY is a decline to 92, or about the 61.8% retracement of the 2018 uptrend. The 61.8% retracements have been pivotal in picking big turns in recent history including 1) The 2018 low was 88.25 vs a retracement of 88.42 and 2) The 2018-19 highs of 97.71 vs a retracement of 97.87," BofAML notes.
"Provided price remains below 97.87 - 98.52 (61.8% level to the TD risk level on the daily chart) then a top could be forming. A double top would specifically be confirmed if the price does not exceed the 97.71 highs and closes below the trough between the peaks of 95.16. This measure could point lower to about 92" BofAML adds.