21 Nov 2024

The US Dollar Index is experiencing a decline, approaching 106.50 during the early European trading session on Thursday. Despite this movement, the index maintains a positive outlook, supported by a bullish Relative Strength Index (RSI). The immediate resistance is identified at 107.45, while the first target for potential downside movement is set at 106.00.

Currently, the US Dollar Index (DXY) is trading with slight losses around 106.50 in the early hours of Thursday's European session. The potential for further decline appears limited, as market participants anticipate that the administration of Donald Trump may reignite inflationary pressures and slow the Federal Reserve's (Fed) rate-cutting trajectory, thereby bolstering the Greenback.

From a technical perspective, the DXY's bullish trend remains strong, with the index consistently trading above the significant 100-day Exponential Moving Average (EMA) on the daily chart. The 14-day RSI is positioned above the midpoint at approximately 66.40, suggesting that the prevailing trend is upward.

The initial target for upward movement in the DXY is located near the upper boundary of the Bollinger Band at 107.45. Should buying momentum continue beyond this threshold, it could lead to a rise towards 108.00, which represents the peak from November 21, 2022. Further resistance is anticipated at 110.25, the high recorded on September 8, 2022.

Conversely, if the index sustains trading below the significant level of 106.00, it may decline to 104.19, the low observed on November 7. The critical support level is identified at 103.71, corresponding to the 100-day EMA. A breach of this support could lead to a further decline towards 102.95, the lower boundary of the Bollinger Band.