US Dollar Index Price Analysis: Monthly support teases DXY bulls amid oversold RSI
- US Dollar Index seesaws near the lowest levels in six months.
- One-month-old descending trend line triggers repeated bounces of the DXY.
- Oversold RSI suggests corrective move but 200-day EMA appears a tough nut to crack for the bulls.
US Dollar Index (DXY) licks its wounds near the lowest levels since mid-June while taking rounds to 103.70 during early Thursday.
In doing so, the greenback’s gauge versus the six major currencies portrays the fourth bounce off the one-month-old descending support line amid the oversold RSI conditions.
As a result, a corrective bounce toward the 50% Fibonacci retracement level of the quote’s January-September upside, near 104.70 appears more likely.
However, the 200-day EMA level surrounding 106.00 acts as a crucial challenge for the DXY bulls to tackle before taking control.
In a case where the US Dollar Index remains firmer past 106.00, the odds of witnessing a run-up towards the late November swing high near 108.00 can’t be ruled out.
Alternatively, a downside break of the aforementioned support line, near 103.50 by the press time, could quickly drag the DXY to the 61.8% Fibonacci retracement level of around 102.30.
Following that, the 102.00 round figure may offer an intermediate halt during the south-run targeting May’s low near 101.30.
Should the DXY remains bearish past 101.30, it becomes vulnerable to breaking the 100.00 psychological magnet.
DXY: Daily chart
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Trend: Recovery expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
