US Dollar Index Price Forecast: Holds losses below 99.00 as bearish bias prevails

The US Dollar Index (DXY), measuring the value of the US Dollar against six major currencies, is experiencing losses for the fourth consecutive day, settling near 98.70 during European trading hours on Thursday. The DXY exhibits a bearish short-term bias, trading below both the nine- and 50-period Exponential Moving Averages (EMAs), indicating that upward rallies are being capped by nearby resistance levels.

The 14-day Relative Strength Index (RSI), currently at 37, suggests lingering downside pressure rather than an imminent oversold rebound. Additionally, the daily chart analysis reveals that the DXY is within a descending channel pattern, reinforcing the bearish reversal trend. However, the FXS Fed Sentiment Index stands at 125.72, firmly positioned in a hawkish stance above the neutral 100 mark.

This sentiment, coupled with a high FXS Speechtracker score, signals a collective shift towards more stringent policy expectations, which is likely to bolster the Dollar against currencies like the Euro and Yen in the near term.

Should the DXY decline, it may approach the six-month low of 97.62, recorded on May 6, followed by a more conservative lower channel boundary around 97.50. The DXY would confront its first support barrier at the nine-day EMA at 99.00. Subsequent resistance is anticipated at the upper boundary of the descending channel, around 99.40, and the 50-day EMA at 99.65.

Should the DXY break above this confluence of resistance, it could trigger a bullish reversal, allowing the index to probe the area around 101.80, the lowest point since May 2025.