US Dollar Index Price Forecast: Tests lower ascending channel boundary around 98.50

• US Dollar Index is attempting to break below the ascending channel around 98.50.
• The 14-day Relative Strength Index is positioned at the 50 level, suggesting the market bias is neutral.
• The primary barrier lies at the nine-day EMA at 98.76.

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is extending its losses for the second consecutive day and trading around 98.60 during the Asian hours on Tuesday. The technical analysis of the daily chart shows the dollar index testing the lower boundary of the ascending channel pattern, suggesting a potential shift in momentum from bullish to bearish.

The short-term price momentum is weaker as the DXY moved below the nine-day Exponential Moving Average (EMA). Additionally, the 14-day Relative Strength Index (RSI) is positioned at the 50 level, indicating the market bias is neutral. Further movements will offer a clear directional bias.

On the downside, a successful break below the ascending channel around the psychological level of 98.50 would prompt the US Dollar Index to test the 50-day EMA at 98.36. Further declines below this confluence support zone would open the doors for the DXY to navigate the region around the 96.22, the lowest since February 2022, reached on September 17.

The US Dollar Index may attempt to break above the nine-day EMA at 98.76 to strengthen the short-term price momentum, which could lead the dollar index to approach the two-month high of 99.56, which was reached on October 9. Further resistance lies at the five-month high of 100.26, which was recorded on August 1, followed by the ascending channel's upper boundary around 101.00.

US Dollar Index: Daily Chart