US Dollar Index Price Analysis: DXY fades bounce off 100-DMA inside bullish channel

• US Dollar Index retreats from three-month high within an ascending trend channel from February.
• Sour-sentiment, 100-DMA and upbeat oscillators allow DXY bulls to stay hopeful.
• 200-DMA acts as an extra filter to the north; bears need validation from 104.30.

US Dollar Index (DXY) grinds near the highest levels since early December 2022, making rounds to 105.65-70 during early Thursday. In doing so, the greenback’s gauge versus the six major currencies remains inside a one-month-old bullish channel, as well as keeping the previous day’s corrective bounce off the 100-DMA.

Apart from the 100-DMA support, the bullish MACD signals also keep the DXY buyers hopeful. However, the RSI (14) line approaches the overbought territory as the US Dollar Index (DXY) nears the aforementioned trend channel’s top line, close to 106.15, which in turn suggests limited upside room for the greenback’s gauge.

Adding strength to the 106.15 hurdle is the 38.2% Fibonacci retracement level of the DXY’s fall from the last September to the previous month.

Even if the quote crosses the 106.15 resistance confluence, the 200-DMA hurdle surrounding 106.70 appears a tough nut to crack for the US Dollar Index bulls.

On the flip side, a clear break of the 100-DMA support of 105.25 isn’t an open invitation to the DXY bears as the previously mentioned bullish channel’s support line could test the quote’s further downside near 104.30.

In a case where the DXY remains bearish past 104.30, the odds of witnessing a slump toward the previous monthly low of 100.80 can’t be ruled out.

US Dollar Index: Daily chart

Trend: Limited upside expected