US Dollar Index price forecast: Tests confluence resistance zone around 98.00

• US Dollar Index may find initial support at the six-week low of 97.11.
• Bearish bias strengthens as the 14-day Relative Strength Index remains below 50 mark.
• The psychological level of 98.00 is acting as the immediate support, near the nine-day EMA.

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is holding around and trading around 98.00 during the early European hours on Monday. The technical analysis of the daily chart shows the dollar index remains within a descending channel pattern, suggesting a prevailing bearish bias.

The 14-day Relative Strength Index (RSI) is positioned below the 50 level, strengthening bearish bias. Additionally, the short-term price momentum is also remaining weaker as the DXY is positioned below the nine-day Exponential Moving Average (EMA).

On the downside, the US Dollar Index could find initial support at the six-week low of 97.11, which was recorded on July 24, followed by the descending channel's lower boundary around 97.00. A break below this crucial support zone could reinforce the bearish bias and put downward pressure on the DXY to navigate the region around the three-year low at $96.38, recorded on July 1.

The US Dollar Index is testing psychological level of 98.00, followed by the primary barrier at the nine-day EMA of 98.14, which is aligned with the upper boundary of the descending channel. A successful breach above this confluence resistance area would cause the emergence of the bullish bias and support the pair to test the 50-day EMA at 98.42. Further advances would improve the medium-term price momentum and lead the pair to explore the region around the three-month high at 100.26, which was recorded on August 1.

US Dollar Index: Daily Chart