• The US Dollar Index retreated to 97.40 on Tuesday after rejection near 97.75.
• A brighter market sentiment is boosting demand for riskier assets on Tuesday.
• The Greenback maintains its bullish trend from 95.50 lows in play.
  

The US Dollar Index (DXY) is trimming gains on Tuesday, trading at 97.45 at the time of writing after failing to extend gains past a previous support level, now turned resistance, at the 97.75 area.

The Greenback bottomed at four-year lows near 95.50 last week, but has been paring losses supported by investors’ relief after US President Donald Trump picked Kevin Warsh to replace Jerome Powell as Fed Chair from May.

Earlier this week, the trade deal between India and the US and news about upcoming nuclear talks with Iran have improved market sentiment, shifting investors’ focus towards riskier assets. Furthermore, a partial US government shutdown might be putting additional pressure on the USD.

Technical Analysis: The immediate bias remains bullish

In the 4-hour chart, Dollar Index Spot trades near 97.40, with the Moving Average Convergence Divergence (MACD) in positive territory, suggesting a steady bullish momentum, and the Relative Strength Index (RSI) near 60, reinforcing an improving tone.

Bulls, however, will have to breach resistance at the mentioned 97.75 area (December 24 low) to confirm a deeper recovery, and aim. to the January 20 and 22 lows, at the 98.25 area.

On the downside, immediate support is at Monday's low near 97.00. A bearish reaction below that level would put the current recovery in question and increase pressure towards the January 30 low, at the 96.35 area.

(The technical analysis of this story was written with the help of an AI tool.)