The US Dollar Index (DXY), which measures the Greenback against a basket of currencies, extended its retracement slide from an 18-month high and attracted sellers for a second consecutive day on Friday. Despite this pullback, the index remained above the pivotal 101.60 support level during the early European session, indicating that bearish conviction was limited and the bullish structure remained intact for now [1].
Market sentiment was influenced by several factors, including President Donald Trump's statement that the US would not launch an attack on Iran before the November 3 midterm elections. This, combined with softer crude oil prices and a well-received 30-year bond auction, led to a corrective decline in US bond yields on Thursday, prompting some profit-taking among US Dollar bulls. However, ongoing geopolitical risks related to the US-Iran standoff over Tehran's nuclear program and the US Federal Reserve's hawkish outlook helped limit the downside for the DXY [1].
From a technical perspective, the DXY's position above the 101.60 horizontal resistance, which aligns with the 23.6% Fibonacci retracement of the recent rally, is notable. The Relative Strength Index (RSI) at 47.7 suggests neutral momentum, while the MACD remains slightly negative but above key support, indicating that the bullish trend is intact though upside momentum has cooled. A sustained break below 101.60 could expose further support levels at 101.03 and 100.55, with deeper floors at 100.08, 99.41, and 98.56. On the upside, resistance is seen at 102.55, which may cap gains in the near term. The DXY maintains a bullish near-term bias as long as it stays above the 200-period SMA at 100.27 on the 4-hour chart [1].
CONCLUSION
The US Dollar Index remains supported above a key technical level, with downside limited by geopolitical risks and the Federal Reserve's hawkish stance. While profit-taking and softer yields have cooled upside momentum, the overall bullish structure persists unless the index breaks below 101.60. Market participants are advised to watch these technical levels for further direction.