The US Dollar Index (DXY), which measures the greenback’s value against a basket of six major currencies, is trading higher near 103.50 in early European trading on Thursday.
Despite the gains, further upside may be constrained as the Federal Reserve signaled potential interest rate cuts later this year. Additionally, Fed officials revised economic forecasts, lowering growth expectations while raising projections for inflation and unemployment.
From a technical perspective, the DXY remains bearish, trading below its 100-day Exponential Moving Average (EMA). The 14-day Relative Strength Index (RSI) hovers below the midline at 31.75, reinforcing the downward bias.
Key support is positioned at 103.20, the March 18 low. A sustained decline below this level could expose 101.88, the lower boundary of the Bollinger Band, with a further drop potentially reaching 100.53, the August 28, 2024 low.
On the upside, immediate resistance stands at 104.10, the March 14 high. Beyond this, the next significant levels to watch are 105.45, the high from November 6, 2024, and the critical barrier at 106.00, which aligns with the 100-day EMA and a key psychological threshold.
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