US Dollar Technical Forecast: DXY Breakout Failure Threatens the Yearly Uptrend

US Dollar Index Technical Forecast: USD Weekly Trade Levels (DXY)

DXY has rebounded more than 1% from the August low after a decline of more than 3% from the July high.
The late-August recovery developed from a major confluence of technical support, reinforcing the significance of the recent low.
The index has reclaimed its yearly moving average, but buyers still need follow-through to strengthen the broader recovery case. Pivotal resistance remains overhead.
ADP and Non-Farm Payrolls headline event risk this week as traders reassess the outlook for Fed policy.
Resistance 100.16/42 (key), 101.37, 101.80/98- Support ~99.10, 98.68 (key), 98.24

The U.S. Dollar is attempting to regain its footing after a sharp summer correction drove DXY more than 3% lower from the July high. A late-August rebound from confluent technical support has carried the index back above its yearly moving average, improving the near-term picture as September trade gets underway. Buyers still have work to do, with a major resistance zone overhead likely to determine whether the recovery can develop into a broader advance or gives way to renewed selling pressure. Battle lines drawn on the DXY weekly technical chart.

Review my latest Weekly Strategy Webinar for an in-depth breakdown of this USD setup and more. Join live on Monday’s at 8:30am EST.

US Dollar Price Chart – USD Weekly (DXY)

Chart Prepared by Michael Boutros, Sr. Technical Strategist; DXY on TradingView

Technical Outlook: In my last US Dollar Technical Forecast we noted that DXY was, “vulnerable to further losses within the 2026 uptrend heading into August. From a trading standpoint, losses would need to be limited to the 52-week moving average for the yearly uptrend to remain viable with a weekly close back above 100.42 needed to fuel another run at the highs.” The index spent a brief stint below the 52-week moving average before rebounding off confluent support at the 50% retracement of the yearly range and the 25% parallel of the 2026 uptrend at 98.68. The recovery has extended more than 1.1% off the August low and the focus into the start of September is on whether this recovery marks resumption of the broader uptrend or just a near-term consolidation before the next drop.

Key weekly resistance remains with the 2024 low / low-week close at 100.16/42. Note that the median line converges on this zone over the next few weeks and a breach / weekly close above this slope threshold would be needed to mark resumption of the uptrend. Subsequent resistance objectives eyed at the yearly high-week close (HWC) at 101.37 and 101.80/98- a region defined by the yearly high, the September 2024 high, and the May 2025 high. Look for a larger reaction there IF reached.

Look for initial support back at the yearly moving average (currently ~99.10) followed by the 99.68. A break / weekly close below this level would threaten a larger correction toward the yearly open at 98.24 and key support at the 2025 low-week close (LWC) at 97.65. Note that the lower parallel converges on this level over the next few weeks and losses below this slope would validate a break of the yearly uptrend and put the bears back in control.

Bottom line: The U.S. Dollar rebounded off confluent support with pivotal resistance now in view near the 2024 swing low. From a trading standpoint, losses would need to be limited to 98.68 IF price is heading higher on this stretch with a weekly close above 100.42 still needed to mark uptrend resumption and fuel the next major leg of the advance.

Event risk picks up over the next few days with the ADP private-sector employment report due tomorrow, followed by the highly anticipated Non-Farm Payrolls release on Friday. Treasury yields have surged in recent sessions as the escalating Iran conflict pushed WTI back toward the $90 mark, renewing concerns over the inflation outlook. With the Fed increasingly focused on price stability, a resilient labor market could reinforce expectations for further policy tightening and keep the U.S. dollar supported. Conversely, signs of weakness in employment could challenge the recent rise in rate expectations and take some steam out of the greenback’s advance. Stay nimble into the releases and watch the weekly close for guidance. Review my latest US Dollar Technical Outlook for a closer look at the near-term DXY technical trade levels.

Key Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Weekly Technical Charts

--- Written by Michael Boutros, Senior Technical Strategist

Follow Michael on X @MBForex

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

FOREX.com is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment and CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.forex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.forex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 42.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.

Delayed London Stock Exchange (LSE) Data

The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.