Forecast for the US Dollar Price: The positive forecast is still in effect at 106.50
The US Dollar Index (DXY) trades with modest losses near 106.50 in early European trading on Thursday. However, the downside for the index may remain constrained as market participants anticipate that policies under Donald Trump’s administration could reignite inflation and decelerate the Federal Reserve's rate-cut trajectory, lending support to the Greenback.
From a technical perspective, the bullish outlook for the DXY remains intact, with the index finding solid support above the crucial 100-day Exponential Moving Average (EMA) on the daily chart. Additionally, the 14-day Relative Strength Index (RSI) hovers above the midline at approximately 66.40, suggesting an upward bias.
On the upside, the initial target for the DXY lies near the upper boundary of the Bollinger Band at 107.45. A sustained break above this level could open the door to 108.00, last seen on November 21, 2022. Beyond this, the next resistance level to monitor is 110.25, corresponding to the high from September 8, 2022.
Conversely, on the downside, consistent trading below the psychological level of 106.00 could lead to a decline toward 104.19, the low recorded on November 7. Key support is positioned at 103.71, aligned with the 100-day EMA. Should this level fail to hold, the index could test 102.95, the lower boundary of the Bollinger Band.
US Dollar Index (DXY) Daily Chart
Paraphrasing text from "FX Street" all rights reserved by the original author.
