US Dollar Index Price Forecast: Outlook remains bearish, key support level emerges near 100.00

• The US Dollar Index softens to 101.6 in Tuesday’s early European session, losing 0.19% on the day.

• The negative outlook of the index remains in play below the 100-day EMA.

• Crucial support level to watch is 100.00; the first upside barrier is seen at 103.35.

The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, retreats from its highest level since April 10 to 101.60 during the early European trading hours on Tuesday. Nonetheless, optimism over a tariff deal between the United States (US) and China eases some fears of a trade war between the world's two largest economies, which supports the USD. 

Technically, the bearish sentiment of the DXY remains intact as the index is below the key 100-day Exponential Moving Average (EMA) on the daily chart. However, further consolidation or temporary recovery cannot be ruled out, with the 14-day Relative Strength Index (RSI) hovering around the midline, suggesting neutral momentum in the near term. 

The key support level for the US Dollar Index is located at the 100.00 psychological level. A breach of this level could expose 99.23, the low of May 7. Further south, the next bearish target to watch is 98.02, the low of April 22. 

On the bright side, the 100-day EMA at 103.35 acts as an immediate resistance level for the DXY. The additional OpSite filter is seen at 104.31, the high of April 2. Extended gains could see a rally to 104.71, the high of March 27. 

US Dollar Index (DXY) daily chart