US Dollar Index Price Forecast: DXY struggles near 101.75 amid falling bond yields
- DXY attracts sellers for the third straight day amid declining bond yields and Iran diplomacy hopes.
- Geopolitical uncertainties and Fed rate hike bets could lend some support and help limit losses.
- The constructive technical setup backs the case for the emergence of dip-buyers at lower levels.
The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, extends the post-FOMC retracement slide for the third straight day, dropping to the lower end of its weekly range on Friday. The index trades near the 101.70-101.65 area, down around 0.20% for the day during the first half of the European session and seems poised to end in the red for the third week in a row amid mixed fundamental cues.
US Treasury yields tumbled as investors rushed into safe-haven government bonds after weak tech earnings raised concerns that the massive AI spending may not deliver sufficient returns. Moreover, reviving hopes for a diplomatic solution to end Middle East conflicts undermine the safe-haven US Dollar (USD). However, escalating hostilities between the Iran-backed Houthi group in Yemen and Saudi Arabia, along with threats from the US and Israel to restart attacks after the US midterm elections, keep the geopolitical risk premium in play. Adding to this, bets that the US Federal Reserve (Fed) will raise interest rates again in December could act as a tailwind for the DXY and help limit deeper losses.
From a technical perspective, intraday weakness below the 23.6% Fibonacci retracement level of the August-October upswing favors bearish traders and backs the case for further depreciation. Furthermore, the Moving Average Convergence Divergence (MACD) indicator has now slipped below zero with a negative histogram, suggesting that the upside momentum is moderating. However, the Relative Strength Index (RSI) near 50 hints at some near-term consolidation after prior overbought readings rather than a decisive reversal. Hence, any subsequent slide could find support at the 38.2% retracement at 101.28, ahead of the 50% level at 100.77, reinforced by the 100-day Simple Moving Average (SMA) SMA at 100.66.
Deeper pullbacks would likely find buying interest around the 61.8% retracement at 100.26, which, if broken, would expose the 78.6% level at 99.53 and the Fibonacci anchor at 98.60. On the topside, initial resistance emerges at the 23.6% Fibo. retracement at 101.91, with a stronger hurdle at the cycle high around the 103.00 neighborhood.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
DXY daily chart
US Dollar Price This Month
The table below shows the percentage change of US Dollar (USD) against listed major currencies this month. US Dollar was the strongest against the Euro.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.26% | -1.10% | -0.02% | -1.86% | -1.17% | -0.23% | -1.64% | |
| EUR | -1.26% | -2.33% | -1.29% | -3.09% | -2.42% | -1.47% | -2.85% | |
| GBP | 1.10% | 2.33% | 1.06% | -0.77% | -0.12% | 0.88% | -0.46% | |
| JPY | 0.02% | 1.29% | -1.06% | -1.86% | -1.17% | -0.15% | -1.58% | |
| CAD | 1.86% | 3.09% | 0.77% | 1.86% | 0.70% | 1.73% | 0.24% | |
| AUD | 1.17% | 2.42% | 0.12% | 1.17% | -0.70% | 0.96% | -0.41% | |
| NZD | 0.23% | 1.47% | -0.88% | 0.15% | -1.73% | -0.96% | -1.40% | |
| CHF | 1.64% | 2.85% | 0.46% | 1.58% | -0.24% | 0.41% | 1.40% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
