US Dollar Index Price Forecast: Bears eye two-month lows around 99.40

The US Dollar Index (DXY) has slipped lower for two consecutive days on Wednesday, failing to hold above the 100.00 level on Monday. Investors are cautious due to hopes of resolving the Iran war, which increase risk appetite, while falling oil prices are making them less inclined to bet on immediate Federal Reserve (Fed) rate hikes.

The latest macroeconomic data on Tuesday did not bolster the US dollar, as JOLTS Job Openings fell to 7.359 million in June, below expectations of 7.4 million, and Factory Orders for June showed a 0.3% contraction, missing forecasts of a 0.2% increase. The DXY is now at 99.84, marking a corrective decline from its double top above 101.65, with the daily chart showing weak momentum.

Technical indicators, such as the Relative Strength Index (14) and Moving Average Convergence Divergence (MACD), suggest a bearish outlook. Bears are focusing on the two-month lows of 99.38 and the 200-day Simple Moving Average, which could cross around 99.20. A break below these levels could bolster sellers' confidence, with the late May low, around 98.75, and the April-May bottom, near 97.60, to be closely monitored.

The upside has been limited below the 100.00 level this week, with a support-turned-resistance at the 100.40 area (July 15 low, July 31 high) soon to be tested.