US Dollar Short-term Outlook: USD Tests Critical Support Zone
US Dollar Index Technical Outlook: USD Short-term Trade Levels
- US Dollar plunges nearly 2.2% in August- testing key support at monthly range lows
- USD risk for price inflection into monthly cross- Core PCE, Non-Farm Payrolls on tap
- DXY Resistance 99.69, 99.22, 99.58 (key)- Support 97.71/86 (key), 97.21, 96.65/78
The US Dollar has come under renewed pressure, with the DXY Index sliding into a critical support zone. This area has defined the floor for recent trade and marks a pivotal inflection point for near-term direction. Battle lines are drawn on the DXY short-term technical charts heading into the September opening-range.
Review my latest Weekly Strategy Webinar for an in-depth breakdown of this US Dollar technical setup and more. Join live on Monday’s at 8:30am EST.
US Dollar Index Price Chart – USD Daily
Chart Prepared by Michael Boutros, Sr. Technical Strategist; DXY on TradingView
Technical Outlook: In my last US Dollar Short-term Outlook we noted that the DXY, “pullback is searching support as the bulls attempt to validate the July breakout. From a trading standpoint, losses should be limited to the lower parallel IF price is heading higher on this stretch with a close above 100.35 needed to fuel the next major leg of the advance.” The index dropped into lateral support days later with the bulls holding this last line of defense for over two weeks now. Risk for price inflection into this zone with the immediate focus still on a breakout of the Friday 8/22 outside-reversal candle for guidance.
US Dollar Index Price Chart – USD 240min
Chart Prepared by Michael Boutros, Sr. Technical Strategist; DXY on TradingView
Notes: A closer look at USD price action shows DXY trading just above key support at 97.71/86- a region defined by the 2018 swing high, the objective weekly open, and the e61.8% retracement of the July advance. A break / close below this threshold is needed to invalidate the July advance / threaten resumption of the broader downtrend. Subsequent support objectives seen at the 78.6% retracement at 97.21, the 2025 low-day close (LDC) / July open at 96.65/78, and the yearly low at 96.38.
Initial resistance is eyed at the May low at 98.69 and is backed by the 61.8% retracement of the monthly range at 99.23 and the 2023 low at 99.258- both levels of interest for possible topside exhaustion / price inflection IF reached. Ultimately, a breach / close above key resistance at the 2024 low / low close at 100.15/35 is needed to suggest a larger trend reversal is underway.
Bottom line: The US Dollar has pulled back into key support at the monthly range lows, and the focus is on a possible inflection off this mark in the days ahead. From a trading standpoint, rallies would need to be limited to 99.58 IF price is heading lower on this stretch with a break below the July up-slope / 97.71 needed to fuel the next leg of the decline.
Keep in mind we get the release of the Core Personal Consumption Expenditure tomorrow into the extended holiday weekend with Non-Farm Payrolls on tap next week. Stay nimble into the monthly cross and watch the weekly closes here for guidance. Review my latest US Dollar Weekly Forecast for a closer look at the longer-term DXY technical trade levels.
Key US Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk.
Active Short-term Technical Charts
- British Pound Short-term Outlook: GBP/USD Threatens July Downtrend
- Japanese Yen Short-term Outlook: USD/JPY Tests Uptrend Support
- Canadian Dollar Short-term Outlook: USD/CAD Coils Within July Uptrend
- Australian Dollar Short-term Outlook: AUD/USD Recovery at Resistance
- Gold Short-term Outlook: XAU/USD Rebound Testing Key Resistance
- Swiss Franc Short-term Outlook: USD/CHF Pullback Eyes Uptrend Support
Written by Michael Boutros, Sr Technical Strategist with FOREX.com
Follow Michael on X @MBForex
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Products and services available depend on your location and the entity holding your account. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.
Contracts for Difference (CFDs) are not available to US residents.
FOREX.com is a trading name of GAIN Capital - FOREX.com Canada Limited, 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA is a member of the Canadian Investment Regulatory Organization and Member of the Canadian Investor Protection Fund. GAIN Capital – FOREX.com Canada Limited is a wholly-owned subsidiary of StoneX Group Inc.
Complaints are taken very seriously at FOREX.com. You can view our complaints procedure here.
© FOREX.COM 2026