- The index rises slightly after its bounce off the two-week support line and the 21-day SMA.
- The 12-week resistance line and the 50-day SMA limit the immediate rally.
- RSI conditions suggest a continuation of the sideways movement.
The DXY US Dollar Index slightly extends the recovery move above the 90.20 region at the start of the European session on Wednesday. The DXY index retreated the day before from a downtrend line since November 2. However, the 21-day SMA and a short-term bullish support line supported further declines.
Although the latest bounce from the key confluence support, coupled with a balanced RSI, favors the extension of the corrective pullback to the upside, the 12-week resistance line and 50-day SMA limit the immediate rally.
As a result, the current bullish momentum, which is pointing to the resistance line indicated now at 90.54, may quickly disappear if it does not cross the 50-day SMA at 90.65.
Conversely, a drop below the confluence support at 90.13 and the round 90.00 level for could attract new bears.
While the RSI appears to be failing to show a clear direction, the movements of the DXY index are likely to await today’s US Federal Open Market Committee (FOMC) meeting.
US Dollar Index DXY Daily Chart
US dollar DXY index technical levels
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