The US Dollar (USD) edges modestly higher during the Asian session on Wednesday, extending a rebound from its weakest level since early October, in the 97.90–97.85 area, reached in the previous session. The US Dollar Index (DXY), which measures the Greenback against a basket of major currencies, is hovering around 98.30. However, upside momentum remains limited as markets continue to factor in increasingly dovish expectations for the Federal Reserve (Fed).
From a technical standpoint, the broader bias still favors USD sellers. The index recently failed to sustain gains above the key 200-day Simple Moving Average (SMA) and subsequently slipped below the 100-day SMA, reinforcing the bearish narrative. Daily momentum indicators remain in negative territory and are not yet in oversold conditions, suggesting that any near-term recovery could be viewed as a corrective bounce rather than the start of a sustained uptrend.
The technical structure remains fragile, with the 100-day SMA flattening below the declining 200-day SMA, preserving a bearish moving-average alignment. Price action remains capped beneath both indicators, with the 100-day SMA at 98.63 acting as immediate resistance. The Moving Average Convergence Divergence (MACD) remains below both its Signal line and the zero level, while the contracting negative histogram points to fading downside momentum. Meanwhile, the Relative Strength Index (RSI) stands near 35, close to the lower end of neutral territory, with a slight uptick hinting at tentative stabilization.
Despite this pause in selling pressure, downside risks remain as long as DXY trades below its key trend filters. The 200-day SMA, now sloping lower near 99.25, continues to cap rebound attempts. A more convincing recovery would require the RSI to push above the 50 midpoint and a sustained break above the 99.25 region, which would help shift the medium-term outlook back to the upside. Until then, failure to reclaim moving-average resistance is likely to keep the broader bias tilted to the downside.
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