Dollar Index Technical AnalysisThe Dollar Index (DXY) has reached a key weekly resistance zone around 110.26, as shown in the chart. Here's a breakdown of the technical analysis:
Resistance at 110.26:
This level has acted as a critical barrier, causing the current pullback. The index has struggled to sustain momentum above this zone, indicating potential exhaustion for bulls.
Trend Reversal Signals:
The large rejection candles at resistance indicate seller dominance. If the weekly close remains below 109, we could see sustained bearish momentum.
Support Levels Below:
105.35–105.66: Key support zone acting as the next likely target for bears.
103.33–103.82: A significant level to watch if the decline accelerates, providing a potential buy zone.
Shift in COT Data:
The bearish shift in the COT index aligns with the resistance rejection, adding fundamental weight to the technical setup.
Outlook:
With Trump’s policy announcements expected soon, the DXY is at a critical turning point. A break below the immediate support at 108.79 could lead to a drop toward the 105 range. Conversely, if bulls defend this zone, we might see a retest of the 110 resistance.
Trade with caution, as geopolitical and policy events may drive volatility in the coming weeks.
