• The US Dollar Index may find key support near the descending channel’s lower boundary at 106.30.
• The 14-day RSI is below 50, signaling increasing bearish momentum.
• The primary resistance appears at the nine-day EMA at 107.47

The US Dollar Index (DXY) edges higher after registering losses in the previous two consecutive sessions, trading around 106.90 during the European hours on Monday. A review of the daily chart suggests a prevailing bearish bias as the index consolidates within the descending channel pattern.

However, the 14-day Relative Strength Index (RSI) is positioned below the 50 level, indicating a strengthening bearish momentum. Furthermore, the US Dollar Index remains positioned below the nine- and 14-day Exponential Moving Averages (EMAs), confirming the short-term price momentum is weaker.

On the downside, the DXY could approach the lower boundary of the descending channel at 106.30 level, followed by the psychological level of 106.00. A break below this level could reinforce the bearish bias and put downward pressure on the index to test the three-month low at 105.41, which was recorded on December 6.

Regarding resistance, the DXY could find its primary resistance at nine-day EMA at 107.47, followed by 107.66. A decisive break above these levels would improve the short-term price momentum and support the pair to explore the region around the descending channel’s upper boundary at 109.50 level, followed by the five-week high of 109.80, last tested on February 3.
 

US Dollar Index: Daily Chart

(Click on image to enlarge)

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