17 Feb 2025

The US Dollar Index (DXY) is experiencing a slight increase after facing losses in the last two sessions, currently trading around 106.90 during the European trading hours on Monday. An analysis of the daily chart indicates a dominant bearish trend as the index continues to move within a descending channel formation.

The 14-day Relative Strength Index (RSI) remains below the 50 threshold, suggesting a growing bearish momentum. Additionally, the index is trading beneath both the nine- and 14-day Exponential Moving Averages (EMAs), which further supports the notion of weakened short-term price momentum.

On the downside, the DXY may approach the lower boundary of the descending channel at the 106.30 level, followed by the significant psychological level of 106.00. A breach of this level could intensify the bearish sentiment and exert further downward pressure on the index, potentially leading it to test the three-month low of 105.41, recorded on December 6.

Regarding resistance, the DXY could find its primary resistance at nine-day EMA at 107.47, followed by 107.66. A decisive break above these levels would improve the short-term price momentum and support the pair to explore the region around the descending channel’s upper boundary at 109.50 level, followed by the five-week high of 109.80, last tested on February 3.