• USDX rebounds off short-term uptrend line
  • Stochastic climbs to overbought territory

The US dollar index is rising as Fed Chair Powell has stated that an interest rate cut in December is not a foregone conclusion. The price has surpassed the previous peak at 99.30 after rebounding from the short-term uptrend line and the 20-day simple moving average (SMA) at 98.50.

From a technical perspective, the stochastic oscillator is entering the overbought zone, and the RSI is sloping upward above the 50 level, both suggesting that the market may be poised for further gains.

A rally above 99.30 could pave the way toward the psychological level of 100.00, followed by the 200-day SMA at 100.30. A sustained climb above this level could reinforce the bullish bias in the near term, potentially targeting the 101.85 resistance area.

However, a drop below the uptrend line could expose the index to the 50-day SMA, which coincides with the 97.85 support level. Further downside could be limited by the 97.10 hurdle and the three-and-a-half-year low of 95.81.

As the technical indicators support a bullish continuation, the market remains sensitive to Fed policy signals. A break above 99.30 would strengthen the bullish outlook, but a failure to hold above the uptrend could shift the focus to key support levels below 98.00.

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