The US Dollar Index (DXY), a measure of the value of the US Dollar (USD) against a basket of six major currencies, attracted some buyers around 103.50 during the early European session on Wednesday (3/19). Traders are preparing for the Federal Reserve's (Fed) interest rate decision later on Wednesday, with no change in interest rates expected.

Fed officials' fresh economic projections will be closely watched as they could provide some clues on how policymakers view the possible impact of US President Donald Trump's administration's policies.

Technically, the bearish outlook for the DXY remains in place, as the index is holding below the key 100-day Exponential Moving Average (EMA) on the daily timeframe. The path of least resistance is to the downside as the 14-day Relative Strength Index (RSI), which is below the midline near 31.15, favors sellers in the near term. In a bearish event, the March 18 low of 103.20 acts as an initial support level for the USD index. The key level to watch is 102.00, which represents the psychological level and the lower boundary of the Bollinger Band. A sustained decline could lead to a drop to 100.53, the August 28, 2024 low.

On the upside, the immediate resistance level for the DXY comes in at 104.10, the March 14 high. Further north, the next hurdle is seen at 105.45, the November 6, 2024 high. Any follow-through buying above this level could lead to a rally to 106.10, the 100-day EMA.(Newsmaker23)

Source: FXstreet