US Dollar Index Forecast: Bearish Momentum Below 100-Day EMA, Key Support at 98.00

US Dollar Index Price Forecast: Bearish Bias with Support Near 98.00

The US Dollar Index (DXY) declined by 0.28% to around 98.55 during Wednesday’s early European session as traders remain cautious ahead of the Federal Reserve’s interest rate announcement later in the day. Geopolitical tensions between Israel and Iran are also contributing to the cautious mood.

Technical Outlook: Bearish Momentum Persists

On the daily chart, the DXY continues to trade below the 100-day Exponential Moving Average (EMA), reinforcing a bearish outlook. The 14-day Relative Strength Index (RSI) remains below the neutral 50-line, currently near 43.80, confirming selling pressure.

Key Levels to Watch

• Support: The immediate support zone lies between 98.00 and 97.90, a significant psychological barrier and the lower boundary of the Bollinger Bands. A drop below this may open the way to the June 12 low at 97.61.
• Further downside: Breaking the 97.61 level could push the index down to the February 25, 2022 low of 96.55.
• Resistance: On the upside, the crucial psychological resistance remains at the 100.00 level, which needs to be breached for any bullish reversal.