The US dollar index has experienced a minor pullback in the short-term after peaking at the 19-month high of 97.41. However, the price has regained traction since the 95.10 floor rejected a price decline twice, while the 50-day simple moving average (SMA) seems to be capping its upside move.
The momentum indicators reflect that bullish forces have gained the upper hand. The stochastic oscillator is trending upwards, and the RSI is pointing up after crossing above its 50-neutral mark.
Should the buying interest intensify further and the price crosses above its 50-SMA, initial resistance might be encountered at the 96.25 region. Conquering this hurdle, the bulls could then target the November high of 96.90. Crossing above this obstacle, the price ascent may cease at the 19-month high of 97.41 before the price marches higher to create fresh highs.
On the flipside, if positive momentum fades and the price reverses downwards the recent low of 95.10 could act as immediate support. Further downside pressure could send the price to test 94.60 or lower to challenge the 93.80 region. Dipping beneath these levels, the spotlight might turn to the 93.25 barrier.
Overall, the resumption of the US dollar index’s near-term rebound remains the most likely scenario. However, a break below the 95.10 barricade could trigger further selling interest, extending the index’s short-term decline.
