

Market Analysis
The US Dollar Index (DXY) has begun to recover its recent losses, trading around 103.20 during European trading hours on Monday. Analyzing the daily chart reveals that the index is moving within a descending wedge, suggesting a bearish trend. A further movement towards the narrow end of this wedge could signal a potential trend reversal.
The Moving Average Convergence Divergence (MACD) indicator is showing bearish momentum, with the MACD line positioned below both the signal line and the centerline. A convergence of the MACD line beneath the signal line may indicate a potential weakening of the current bearish momentum for the US Dollar Index.
Additionally, the 14-day Relative Strength Index (RSI) remains above the 30 level, suggesting a possible correction is on the horizon. An increase towards the 50 level would imply a diminishing bearish outlook.
On the downside, the USD may test crucial support at the lower boundary of the descending wedge around 102.90. A breach of this level could intensify downward pressure, potentially leading the index to revisit a six-month low of 102.17, recorded on August 5.
On the upside, the DXY could encounter immediate resistance around the nine-day Exponential Moving Average (EMA) at 103.39, followed by the upper edge of the descending wedge near 103.60. A break above this resistance could drive the index towards a six-week high of 104.80, observed on July 30.
Paraphrasing text from "FX Street" all rights reserved by the original author.