US Dollar Index Forecast: Testing Key Support at 103.50 Near Four-Month Low.

US Dollar Index (DXY) Forecast: Testing Key Support at 103.50 Amid Bearish Pressure

The US Dollar Index (DXY), which tracks the USD against a basket of six major currencies, remains stable after gaining in the previous session, hovering around 103.60 during Asian trading hours on Thursday. However, technical indicators suggest a bearish bias, as the index continues its downward trend within a descending channel pattern.

Technical Analysis: Bearish Momentum Persists

The US Dollar Index is currently trading below the 9-day and 50-day Exponential Moving Averages (EMAs), signaling weakness in both short- and medium-term trends. Meanwhile, the 14-day Relative Strength Index (RSI) remains below 30, indicating oversold conditions, which could trigger a potential upward correction.

Key Support and Resistance Levels to Watch

• Support Levels:

  • 103.34: Four-month low recorded on November 6.
  • 103.00: Lower boundary of the descending channel.
  • 100.68: Five-month low—potential target if bearish momentum continues.

• Resistance Levels:

  • 104.34: 9-day EMA—key barrier for short-term bullish attempts.
  • 106.44: 50-day EMA—next resistance level if momentum strengthens.
  • 106.70: Upper boundary of the descending channel—critical level for trend reversal.

Market Outlook: Will the DXY Rebound or Continue Its Decline?

A break below 103.00 could accelerate bearish momentum, pushing the US Dollar Index toward deeper lows. However, if the oversold RSI sparks a rebound, the DXY may aim for resistance at 104.34 and beyond.

Final Thoughts

Traders should watch for breakout signals around key support and resistance zones, as the US Dollar Index navigates near multi-month lows. A decisive move in either direction could set the tone for USD price action in the coming sessions.

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