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Technical Analysis
The daily chart of the U.S. Dollar Index shows that the rebound from the late-January low at 95.306 lost momentum after topping near the 127.0% Fibonacci level at 100.268. The latest move has pushed the price down to around 98.461, below the rising trendline that had supported the advance from late January into early April. That trendline break weakens the prior bullish structure and shifts the short-term tone back to the downside.
The price has also slipped below the 88.6% Fibonacci level at 98.768, which now acts as the first resistance zone. Below that, the next key upside barriers are 99.213 and 99.714. On the downside, the chart points to 97.721 as the first meaningful support, followed by 96.799 if selling pressure extends.
Momentum indicators also lean bearish. The RSI is at 43, which places it below the neutral 50 area and suggests fading upside momentum. At the same time, On-Balance Volume is trending lower, signaling weaker buying participation and stronger distribution during the latest pullback. Taken together, the chart favors a cautious bearish view unless the index quickly reclaims the 98.768-99.213 resistance zone.
Fundamental Note
The latest macro backdrop is mixed, but it has recently leaned against the dollar. Reuters reported that the dollar was on track for its largest weekly drop since January as safe-haven demand eased after the U.S.-Iran ceasefire and as markets looked ahead to peace talks in Islamabad. At the same time, March U.S. CPI rose 0.9% month-on-month and 3.3% year-on-year, with gasoline accounting for nearly three-quarters of the monthly increase, while the Fed’s March minutes said higher crude prices and tariffs had lifted the inflation outlook and kept risks to growth tilted down and inflation tilted somewhat up. In practical terms, easing geopolitical fear is weighing on the dollar, but sticky inflation is limiting the pace of downside follow-through.
Trading Signal
Signal: Sell on weakness
Entry: 98.45
Stop Loss: 99.25
Take Profit 1: 97.72
Take Profit 2: 96.80
This setup is based on the break below rising trend support, the loss of the 88.6% Fibonacci level, the falling RSI, and weakening OBV. A sustained move back above 98.768 would reduce immediate bearish pressure, while a recovery above 99.213 would materially weaken this sell setup.
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