US Dollar Index price forecast: Rebounds near 98.00, eyes nine-day EMA

• US Dollar Index may find the initial barrier at the nine-day EMA of 98.47.
• Bearish bias is in play as the 14-day Relative Strength Index remains below 50 mark.
• The psychological level of 98.00 acts as the immediate support.

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is gaining ground after two days of losses and trading around 98.20 during the early European hours on Friday.

The technical analysis of the daily chart shows the US Dollar Index remaining within an ascending channel pattern, suggesting a persistent bullish bias. However, the 14-day Relative Strength Index (RSI) is positioned below the 50 level, indicating that bearish bias is in play. The short-term price momentum is also remaining weaker as the DXY is positioned below the nine-day Exponential Moving Average (EMA).

On the upside, the US Dollar Index may target the primary barrier at the nine-day EMA of 98.47, followed by the 50-day EMA at 98.61. A successful breach above this level would strengthen the short- and medium-term price momentum and prompt the dollar index to explore the region around the three-month high at 100.26, which was recorded on August 1, followed by the upper boundary of the ascending channel around 100.50.

The initial support appears at the psychological level of 98.00, followed by the ascending channel's lower boundary around 97.70. Further declines below the channel would confirm the bearish bias and put downward pressure on the US Dollar Index to navigate the region around the three-year low at $96.38, recorded on July 1.

US Dollar Index: Daily Chart