The US Dollar Index (DXY) fluctuates near 104.00 ahead of Wednesday’s highly-anticipated Federal Reserve (Fed) meeting. Market participants await fresh guidance on the US interest rate trajectory.

Key Factors:

• Fed Outlook: The Fed’s updated Dot Plot and Chair Powell’s commentary will set the tone for the US Dollar. Dovish signals could trigger a downside correction.
• Sticky Inflation: Persistent inflation supports expectations for continued Fed hawkishness.

Technical Outlook:

• Bullish Bias: The RSI slopes upward in positive territory, and the MACD shows rising green bars, suggesting bullish momentum.
• Key SMAs: The DXY trades above the convergence of the 20, 100, and 200-day SMAs near 103.50-70, indicating a bullish outlook.
• Crucial Support: Bulls need to establish strong support above the SMAs for further gains.