US Dollar Index Price Analysis: DXY bears keep the reins near multi-day low

• US Dollar Index remains pressured around seven-month low.
• Seven-week-old falling wedge bullish chart formation challenges the bears but the swing-point is far from here.
• 100-SMA adds strength to the 104.30 resistance confluence.

US Dollar Index (DXY) fails to witness a positive start to 2023 as it remains pressured near the seven-month low, marked the previous day around 103.40, during the early hours of Monday’s Asian session.

The US Dollar’s gauge versus the six major currencies dropped to the lowest levels since early June 2022 on Friday after breaking a two-week-old ascending trend line, currently around 103.85. The downside momentum also took clues from the bearish MACD signals to favor DXY sellers.

With this, the DXY bears are all set to revisit the early June 2022 swing high near 102.70.

However, a seven-week-old falling wedge bullish chart formation’s support line could restrict the quote’s further downside, around 102.35 at the latest.

In a case where the US Dollar Index drops below 102.35, the 102.00 threshold and May 2022 low of 101.30 could lure the sellers.

On the flip side, DXY recovery remains elusive unless crossing the support-turned-resistance surrounding 103.85.

Even so, a convergence of the stated wedge’s upper line and the 100-SMA challenges the US Dollar Index bulls near 104.30 level.

It’s worth noting, however, that a successful break of 104.30 won’t hesitate to propel the quote towards the late November swing high surrounding 108.00.

Overall, DXY is likely to remain bearish but the downside room appears limited.

US Dollar Index: Four-hour chart

Trend: Further downside expected