US Dollar Index Price Analysis: Next on the downside comes 107.60

• DXY adds to the weekly decline and revisits the 108.40/35 band.
• A deeper drop to the 107.60 area should not be ruled out.

DXY intensifies the weekly retracement and breaks below the key 109.00 support with certain conviction on Friday.

Despite the corrective decline, the underlying bullish view in the dollar remains unchanged. That said, the index could allow a deeper drop to, initially, the weekly low at 107.58 (August 26). The proximity of the temporary 55-day SMA, today at 107.17, also reinforces this support zone.

In the meantime, the short-term constructive perspective remains bolstered by the 7-month support line just below 106.00.

Looking at the long-term scenario, the bullish view in the dollar remains in place while above the 200-day SMA at 101.33.

DXY daily chart