• DXY stays below 100-SMA, eyes monthly support line for further declines.
• Sluggish Momentum, multiple supports to the south challenge bears.
• Bulls need to cross 13-day-old hurdle for fresh entry.
• Fed is expected to announce faster tapering but Omicron challenges hawks.

Despite the day-start uptick, the US Dollar Index (DXY) remains beneath the 100-SMA during early Monday. Also keeping the greenback bears hopeful is the Momentum line and the lower high formation, marked after refreshing the 17-month high in November.

It should be noted, however, that a clear downside break of an ascending support line from November 15, around 96.00 by the press time, becomes necessary for the DXY to convince bears.

Even so, a six-week-old trend line support and 200-SMA, respectively near 95.60 and 95.35, will challenge further downside of the US Dollar Index. Following that, the 95.00 threshold and early November’s swing high close to 94.60 will be in focus.

Alternatively, an upside clearance of the 100-SMA level of 96.25 will direct the DXY bulls towards a downward sloping resistance line from November 24, near 96.50 at the latest.

In a case where the US Dollar Index remains firmer past-96.50, odds of the quote’s rally to refresh the multi-month high can’t be ruled out. In doing so, the 97.00 round figure will act as an extra upside filter.

Also read: Attention shifts to the Fed as US CPI hits a 39-year high

DXY: Four-hour chart

Trend: Further weakness expected