US Dollar Index (DXY) Price Forecast: Seems vulnerable near 100.70; break below 200-period SMA on H4 awaited

• The USD remains on the back foot for the second straight day, though it lacks follow-through selling.
• The technical setup favors bearish trades and supports prospects for a further depreciating move.
• A sustained break below the 200-period SMA on H4 is needed to reaffirm the negative outlook.

The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, trades with a negative bias for the second straight day on Friday, though the intraday downtick lacks bearish conviction. The index currently trades around the 100.70 region, down just over 0.10% for the day, and manages to hold above the 200-period Simple Moving Average (SMA) on the 4-hour chart.

Meanwhile, bearish technical indicators on hourly/daily charts support prospects for an eventual breakdown below the said support, currently pegged near the 100.50 region. The subsequent fall could make the DXY vulnerable to extend this week's retracement slide from its highest level since April 10 and test the weekly swing low, around the 100.00 psychological mark touched on Wednesday.

Some follow-through selling will suggest that the recent recovery from the year-to-date low touched on April 21 has run its course and pave the way for deeper losses. The DXY could then fall to the 99.60-99.55 intermediate support en route to the 99.20 area and the 99.00 round-figure mark.

On the flip side, the immediate hurdle is pegged near the 101.00-101.10 region, above which a fresh bout of a short-covering move could lift the DXY to the 101.70 region. The US Dollar (USD) bulls might then make a fresh attempt to conquer the 102.00 mark. A sustained strength beyond the latter might negate any near-term negative bias and pave the way for some meaningful appreciating move.

DXY 4-hour chart