US Dollar Index Price Forecast: Tests 100.50 support, with nine-day EMA providing backing

• The US Dollar Index could retest the 50-day EMA near the 101.78 level.
• Technical analysis indicates a continued bullish bias, as the index remains within an ascending channel.
• The DXY is testing its initial support at the nine-day EMA of 100.47.

The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against a basket of six major currencies, is losing ground for the second successive session, trading near 100.50 during the European hours on Wednesday.

On the daily chart, technical analysis suggested a sustained bullish bias, with the index trading within an ascending channel. Additionally, the DXY is still positioned above the nine-day Exponential Moving Average (EMA), indicating that short-term momentum is stronger. However, the 14-day Relative Strength Index (RSI) moves below the 50 level, indicating weakening of a bullish bias.

To the upside, the US Dollar Index may target again the 50-day EMA at the 101.77 level, followed by the upper boundary of the ascending channel around 102.10. A break above this crucial resistance zone would reinforce bullish bias and support the index to explore the area around the two-month high at 104.37, reached on April 1.

On the downside, immediate support is seen at the nine-day EMA of 100.47. A break below this level could weaken the short-term price momentum and lead the DXY to test the lower boundary of the ascending channel around 99.80. A break below the channel would dampen the bullish bias and put pressure on the index to navigate the region around 97.91 -- the lowest level since March 2022, which was recorded on April 21.

US Dollar Index: Daily Chart