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

StoneX Financial Ltd (trading as "FOREX.com") is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, FOREX.com does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date.

This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it. No opinion given in this material constitutes a recommendation by FOREX.com or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although FOREX.com is not specifically prevented from dealing before providing this material, FOREX.com does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Financial Ltd. StoneX Financial Ltd is a company incorporated in England and Wales with UK Companies House number 05616586 and with its registered office at 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is authorised and regulated by the Financial Conduct Authority in the UK, with FCA Register Number: 446717.

FOREX.com is a trademark of StoneX Financial Ltd . This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy. FOREX.com products and services are not intended for Belgium residents.