US Dollar Index Price Forecast: Holds gains around 107.00 despite increased bearish bias

• The US Dollar Index may face challenges as the 14-day RSI remains below 50, signaling increased bearish bias.
• The primary key support appears around the descending channel’s lower boundary at 106.30.
• The DXY may target its primary resistance at the nine-day EMA of 107.34

The US Dollar Index (DXY) ticks higher on Tuesday, hovering around 107.00 during European trading hours after three consecutive sessions of losses. The daily chart indicates a prevailing bearish bias as the index remains confined within a descending channel.

The 14-day Relative Strength Index (RSI) sits below the 50 mark, signaling strengthening bearish momentum. Additionally, the DXY remains below the nine- and 14-day Exponential Moving Averages (EMAs), reinforcing weak short-term price momentum.

On the downside, the US Dollar Index may test the lower boundary of the descending channel at 106.30, followed by psychological support at 106.00. A break below this level could deepen the bearish trend, potentially pushing the index toward the three-month low of 105.41, recorded on December 6.

Conversely, immediate resistance lies at the nine-day EMA of 107.34, followed by the 14-day EMA at 107.54. A decisive break above these levels could improve short-term momentum, opening the door for a move toward the upper boundary of the descending channel at 109.50, with further upside potential toward the five-week high of 109.80, last tested on February 3.

US Dollar Index: Daily Chart