US Dollar Index Price Forecast: Keep a bearish vibe, crucial support level emerges near 98.00

• The US Dollar Index trades on a weaker note near 98.55 in Wednesday's early European session, losing 0.28% on the day. 
• The negative outlook of the index remains in play below the 100-day EMA with a bearish RSI indicator. 
• First support level to watch is in the 98.00-97.90 zone; key resistance level to watch is the 100.00 psychological level. 

The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, attracts some sellers to around 98.55 during the early European trading hours on Wednesday. Traders continue to assess the conflict between Israel and Iran ahead of a Federal Reserve (Fed) decision on interest rates later on Wednesday.

According to the daily chart, the bearish outlook of the DXY remains intact, with the index holding below the key 100-day Exponential Moving Average (EMA). Further downside looks favorable as the 14-day Relative Strength Index (RSI) stands below the midline near 43.80.

The initial support level for the USD index is located in the 98.00-97.90 zone, representing the psychological level and the lower limit of the Bollinger Band. Sustained trading below the mentioned level could expose 97.61, the low of June 12. A breach of this level could see a drop to 96.55, the low of February 25, 2022. 

On the other hand, the key resistance level for the DXY emerges at 100.00, portraying the psychological figure and the upper boundary of the Bollinger Band. A decisive break above this level could pave the way to 101.65, the 100-day EMA. The next upside barrier is seen at 101.98, the high of May 12. 

US Dollar Index (DXY) daily chart