The US Dollar Index rebounds above its 50-day EMA, supported by Fed sentiment, though technicals suggest potential downside risks.
The US Dollar Index (DXY) recovered to near 101.00 in European trading on Thursday, reversing two days of losses. The index remains above its 50-day Exponential Moving Average (EMA), signaling a mildly bullish near-term bias, though gains are limited by the nine-day EMA at 101.14.
The 14-day Relative Strength Index (RSI) at 51 indicates balanced but slightly positive momentum, while the FXS Fed Sentiment Index at 147.58 reflects supportive policy expectations. However, the DXY trades below an ascending channel pattern, raising the possibility of a bearish reversal.
Immediate resistance lies at the nine-day EMA, with a breakout potentially targeting the 14-month high of 101.80. Support is seen at the 50-day EMA of 100.54, with further declines risking a drop toward the May low of 97.62.