US Dollar Short-term Outlook: USD Bulls Eye Pivotal Resistance Test

US Dollar Index Technical Outlook: USD Short-term Trade Levels

US Dollar extends September rally toward key resistance near monthly highs
USD risk for possible exhaustion / price inflection- weekly / monthly opening-ranges in focus
DXY Resistance 98.68/94 (key), 99.39, 99.85- Support 97.95, 97.71/76 (key), 97.01/13

The US Dollar is pressing into a pivotal resistance zone as the post-Fed rally approaches the September highs. The broader range remains intact, but the reaction at this level will be critical for near-term direction. A breach higher would mark the start of the next leg of the advance, while failure to sustain gains could keep the greenback vulnerable to a deeper pullback. With the government shutdown delaying key data, price action will likely set the tone heading into October trade. Battle lines drawn on the USD short-term technical charts.

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 last month’s US Dollar Short-term Outlook we noted that DXY was approaching support into the July / yearly low (96.38) while highlighting the, “risk for some inflection here. From a trading standpoint, a good zone to reduce short-exposure / lower protective stops- rallies would need to be limited to 97.86 IF price is heading lower on this stretch…” DXY briefly registered an intraday low at 96.22 before reversing sharply higher on heels of the Fed with the recovery now extending more than 2.4% off the lows. The advance is approaching pivotal resistance around the September high and the focus is on possible inflection off this zone in the days ahead IF reached.

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 within the confines of an ascending pitchfork extending off the yearly low with the weekly opening-range taking shape just below the median-line. Key resistance is eyed at 98.68/94- a region defined by the May low, the August high-day close (HDC), the 61.8% retracement of the August decline, and the 61.8% extension of the September advance. A topside breach / close above this threshold is needed to suggest a more significant low is in place with subsequent resistance objectives eyed at the 78.6% retracement at 99.39 and the 100% extension at 99.85. Ultimately, a breach of the 2024 low / low-close at 100.15/35 is needed to validate a larger trend reversal in the Dollar.

Weekly open support rests at 97.95 and is backed closely by the 2018 high / 38.2% retracement at 97.71/76- losses below this threshold would invalidate the near-term uptrend and threaten another test of the lows. Subsequent support rests with the 61.8% retracement of the September advance / the 2025 low-day close (LDC) at 97.01/13 and the yearly low / July low at 96.21/38.

Bottom line: The US Dollar recovery is approaching key technical resistance near the September highs with the October opening-range taking shape just below. From at trading standpoint, losses should be limited to 97.71 IF price is heading higher on this stretch with a daily close above 98.94 needed to fuel the next major leg of the advance.

With the economic docket rather light this week, traders will be closely monitoring headlines regarding the ongoing government shutdown. Stay nimble here and watch the weekly opening-range break 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

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.

FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosures and Risk Warning. Increased leverage increases risk.

GAIN Capital Group LLC (dba FOREX.com) 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA. GAIN Capital Group LLC is a wholly-owned subsidiary of StoneX Group Inc.