US Dollar Index Price Forecast: Treads water above nine-day EMA support near 108.00

• The US Dollar Index consolidates as the 14-day RSI) suggests a neutral market stance with no buying or selling pressure.
• A break below the 108.00 level would lead the index toward its eight-week low of 106.97.
• The primary barrier appears around the descending channel's upper boundary at 109.70 level.

The US Dollar Index (DXY) recovers its losses from the previous two sessions, trading around 108.10 during Asian hours on Wednesday. A review of the daily chart suggests a bearish bias as the index consolidates within the descending channel pattern.

However, the 14-day Relative Strength Index (RSI) is hovering around the 50 level, indicating a neutral market stance with no significant buying or selling pressure. Further moves would offer a clear directional trend. Furthermore, the US Dollar Index remains positioned on the nine-day Exponential Moving Average (EMA), confirming the short-term price momentum is neutral.

On the downside, the DXY tests the nine-day EMA at 108.04 level, aligned with the psychological level of 108.00. A break below the latter would weaken the short-term price momentum and lead the index to navigate the region around its eight-week low of 106.97, which was recorded on January 27. Further depreciation below this level could strengthen the bearish bias, pushing the index toward the lower boundary of the descending channel at 106.50.

Regarding resistance, the DXY could explore the area around the upper boundary of the descending channel at 109.70 level, followed by the four-week high of 109.80, last tested on February 3.

US Dollar Index: Daily Chart