The US Dollar Index (DXY), which tracks the USD’s value against six key currencies, is experiencing an uptick after two days of decline, sitting at around 101.00 during European trading on Thursday. It’s trading above the 50-day exponential moving average (EMA), showing a mild bullish trend in the short term. That said, this upward movement seems to be limited by the 9-day EMA in the near term.
The 14-day Relative Strength Index (RSI), hovering near 51, indicates a somewhat balanced but slightly positive momentum. Meanwhile, the rising FXS Fed Sentiment Index, now at 147.58, signals that policy expectations are continuing to support the dollar, even though prices are just below a near-term resistance level. However, a technical analysis of the daily chart reveals the dollar index is trading just beneath an ascending channel, hinting at a potential bearish reversal.
The immediate resistance for the USD index is set at the 9-day EMA of 101.14. If there’s a rebound within the ascending channel, it could bolster the bullish outlook and enable the dollar index to potentially test the 14-month peak of 101.80 from June 24, and possibly the upper limit of the channel near 103.60.
On the downside, the primary support is at the 50-day EMA around 100.54. If the index weakens further, it could usher in a bearish phase, exerting downward pressure and keeping it near the almost five-month low of 97.62 hit on May 6.
