The US Dollar Index (DXY) may revisit the upper boundary of its rising channel at approximately 100.80. A confirmed break above the 50 mark is necessary to signal a shift towards bullish momentum. Current trading positions the DXY near 100.60, indicating a second consecutive session of decline.

Technical analysis on the daily chart highlights a bullish trend, with the index maintaining its position within an ascending channel. The DXY’s hold above the nine-day Exponential Moving Average (EMA) suggests strengthening short-term momentum. However, the 14-day Relative Strength Index (RSI) remains below 50, suggesting bearish tendencies.

Key Levels To Watch

To rise further, the index needs to breach the current channel ceiling, targeting the 50-day EMA at 101.81. Surpassing this level could boost medium-term momentum, approaching the two-month high of 104.37. Conversely, immediate support lies at the nine-day EMA of 100.10. A decline below could weaken the index towards 99.50, potentially leading to the area around 97.91.

The heat map illustrates the US Dollar’s performance against other major currencies, revealing it weakened most against the Japanese Yen. For example, the USD depreciated by 0.34% against the JPY. Please conduct detailed research before making financial decisions.

The earlier section walks through a focused technical breakdown of the US Dollar Index — referred to as “DXY” — using a few essential tools like moving averages and RSI (Relative Strength Index) to gauge the market tone. As things stand, the index remains inside a positively sloped channel, which is typically read as constructive if the price continues upward within its bounds. However, right now, there’s a pullback happening — two sessions in a row of downward movement — showing the upward structure might be stalling, or at least pausing for breath.

From where we stand, the path to sustained strength would need to pass through a few milestones. First, that would include a clean move above the 100.80 top of the current rising channel. That level’s importance lies in its role as both a psychological and technical lid — unless price can move cleanly past, momentum will likely remain fragmented. Beyond that, the 50-day EMA becomes the next layer of resistance at 101.81, which if breached, can act as a slingshot toward April’s highs just below 104.40. The move would imply short-term positioning is giving way to something broader, though getting there isn’t guaranteed.

Momentum Conflict

Momentum-wise, there’s plenty of conflict. On one side, the nine-day EMA — a faster-moving average used to track immediate price reactions — is still holding beneath the index. That tends to serve as a soft floor during trend-following periods. And yet, when we bring in the RSI — currently holding below 50 — it reflects subdued underlying demand. This lag in relative strength is typically a red flag for follow-through on any rallies.

The nearest buffer zone on the downside sits around 100.10. That’s where the nine-day EMA rests, and if we dip below it with conviction, the next staging point falls to 99.50. Dive past that, and attention may have to shift toward 97.91, a level not seen since early March. It would be especially telling if such a move happened amid broader de-risking or inflation repricing, both of which would skew expectations around rate differentials.

The comparison against peers shows us where demand is bleeding most. According to the heat map, the US Dollar lost most ground versus the Japanese Yen, with a 0.34% drop in a single session. That performance gap isn’t just one data point; it adds weight to market sentiment leaning away from carry trades and more towards safer havens. Any extension of this relationship would point towards multiple actors rotating out of dollar-denominated exposure into JPY-based balances — often connected to macro unease or yield compression.

Looking forward, attention should remain locked on the reaction to the upper boundary of the current trading channel. If price remains suppressed beneath 100.80, tactical long positioning feels less appealing. Watching RSI to either push above 50 or falter again will add another layer to the directional call. Equally, keep an eye on whether the 99.50 zone brings in willing buyers or fails, as scope for continued moderation in rate pricing could pull the index even lower.

As participants with exposure riding on these price shifts, we’re focused on whether momentum tools start to sync up — instead of conflicting as they are now. Until then, daily closes carry more weight than intraday moves, while short-term setups need to be scrutinised for whipsaw risk.

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