US Dollar Technical Forecast: USD Breakout Looms Ahead of Key Jobs Report

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

US Dollar rally exhausts into key technical resistance early in the month
November opening-range intact ahead of NFPs- breakout to offer guidance
Non-Farm Payrolls expected to shape expectations for the December Fed meeting
DXY Resistance 100.16/42 (key), 101.55/60, 103- Support 98.99-99.08, 97.65/80 (key), 96.94

The US Dollar has been trading within the November opening-range just below resistance, with price action compressing ahead of Thursday’s key jobs report. The broader focus remains on a breakout from this zone for guidance on near-term direction, with the employment data expected to play a decisive role in shaping rate expectations into year-end. Battlelines drawn on the DXY weekly technical chart.

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US Dollar Price Chart – USD Weekly (DXY)

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

Technical Outlook: In last month’s US Dollar Technical Forecast we noted that DXY was, “coiled just below resistance, and the focus is on a breakout of the 97.50-99.66 range for guidance heading into the close of the month. From a trading standpoint, losses should be limited to 97.50 IF the Dollar is higher on this stretch with a breach above 100.41 needed to validate a more significant breakout in price.” The range broke higher later that week with the index registering an intraweek high at 100.36 into the November open before pulling back. The monthly opening-range is set just below key resistance with major event risk on tap- looking for a breakout to drive the next directional move in DXY.

Weekly support rests with the November low and the April low-week close (LWC) at 98.99/99.08 with key support steady at 97.65/80- a region defined by the 2025 LWC and the 61.8% retracement of the September advance. Losses below this threshold would be needed to suggest a more significant high is in place / resumption of the broader downtrend. Subsequent support seen at the 2021 swing high near 96.94.

Key resistance remains unchanged at the 2024 swing low / LWC at 100.16/42. A breach / close above this key pivot zone is needed to fuel the next major leg of this advance with the next major technical consideration seen at the 38.2% retracement of the yearly range and the 52-week moving average at 101.55/60. Look for a larger reaction there IF reached. Subsequent resistance seen at the 2016 high-close (HC) and the 2020 high at 103.

Bottom line: The U.S. Dollar has carved the November opening-range just below resistance- look for a breakout in the days ahead of guidance. From a trading standpoint, losses should be limited to 99 IF price is heading for a breakout on this stretch with a close above 100.42 needed to mark resumption of the September uptrend.

Keep in mind the September Non-Farm Payrolls report is on tap Thursday, and traders will be closely eyeing the first major jobs report in months. Fed Fund Futures have continued to discount the December rate decision with market participants now pricing the probability of a cut next month to just 48%. With recent Fed commentary suggesting the committee remains deeply divided on the path of interest rates and with inflation still running well-above target, employment data will be critical ahead of next month’s policy meeting. Stay nimble ahead of the release and watch the weekly close for guidance. Review my latest US Dollar Short-term Outlook for a closer look at the near-term DXY technical trade levels.

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--- Written by Michael Boutros, Sr Technical Strategist

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