US Dollar Index Tests Critical 100.17 Resistance Amid Bearish Trend

The U.S. Dollar Index (DXY) is facing a critical test at a key technical resistance level, a development that could determine its short-term trajectory. According to an analysis by Investing.com, the index was trading around 99.89 on its 4-hour chart, remaining in a bearish trend but showing early signs that selling pressure may be abating.

Key Technical Levels in Focus

The primary battleground for the dollar is the resistance level at 100.17. This price point represents a confluence of the 20-period simple moving average (SMA) and a 38.2% Fibonacci retracement level, making it a significant hurdle for buyers.

According to the analysis, the index remains firmly in a downtrend, trading below its 20, 50, and 200-period moving averages. Key support is identified in the 99.30–99.50 range. A break below this zone could open the door to further downside for the greenback.

Conflicting Signals Emerge

While the overarching trend remains bearish, several indicators suggest a potential loss of downward momentum. Analysts noted the formation of a higher low at 99.54, which can indicate that sellers are losing control. Furthermore, other technical signals point to a potential shift:

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• The MACD (Moving Average Convergence Divergence) indicator shows that bearish momentum is fading.
• The RSI (Relative Strength Index) has bounced to 38.27 after previously being in oversold territory.

These conflicting signals create an environment of uncertainty, where a decisive price move is needed to confirm the next direction. A sustained break of key levels is now crucial for both bulls and bears.

Potential Scenarios for the Dollar

For the bearish trend to continue, the Dollar Index would need to be rejected at the 100.17 resistance area. Such a failure could trigger another move down toward the 99.30 support level, reaffirming the prevailing downtrend.

Conversely, a bullish reversal would require a decisive 4-hour close above 100.17. If buyers succeed, the next potential target would be near 100.85, which aligns with the 50-period SMA and a 61.8% Fibonacci level. However, given the established downtrend, reclaiming this ground is seen as a significant challenge.