Back to the Blog Main Page
12/06/25
19
US Dollar Index Slides: Key Support Levels in Focus Amid Rate Cut Expectations
The US Dollar Index has seen a notable decline, dropping to approximately 98.35 during early European trading on Thursday, reflecting a decrease of 0.26% for the day. This downward trend continues to be influenced by bearish sentiment as the index remains below the 100-day Exponential Moving Average (EMA). Analysts are particularly focused on a key support range between 98.10 and 98.00, while the first level of resistance is observed at 99.38.
Factors contributing to the DXY’s slump include heightened expectations regarding potential interest rate cuts by the Federal Reserve this year, combined with ongoing uncertainties surrounding international tariff disputes. Investors are eagerly awaiting the release of the US Producer Price Index (PPI) later in the day, along with the latest figures for Initial Jobless Claims.
From a technical perspective, the outlook for the Dollar Index remains pessimistic, as indicated by its position beneath the significant 100-day EMA. The index is also bolstered by a reading from the 14-day Relative Strength Index (RSI), which is currently hovering near 38.80, suggesting that further declines could be likely in the near future.
Monitoring the support levels, the 98.10-98.00 area is critical, not only as it aligns with the lower limit of the Bollinger Band but also represents a psychological level for traders. A breach below this support could lead to a decline towards 97.70, a low established on March 30, 2022. Should bearish pressures persist, attention would subsequently turn to 96.55, the low reached on February 25, 2022.
On the other hand, the Dollar Index does have some resistance to contend with. The recent high recorded on June 10 at 99.38 could act as an immediate barrier, followed by the psychological level of 100.00. If upward momentum is sustained, there may be potential for the index to rally further, targeting the upper boundary of the Bollinger Band at 100.60.
Promotions
