US Dollar Technical Forecast: USD Stabilizes Near Support—Recovery Risk Builds

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

• DXY has stabilized after a sharp decline, holding above a key support zone.
• Price action suggests a potential near-term recovery within a broader downtrend.
• A sustained rebound would signal a stronger recovery phase while failure to hold support would expose the Dollar to renewed downside pressure.
• Event risk ahead: Federal Reserve interest rate decision and Personal Consumption Expenditures next week
• Resistance ~98.62, 99.49, 100.16/42 (key)- Support 98.24, 97.50/65, 96.88/98 (key)

The US Dollar is attempting to stabilize after a notable pullback from the yearly high, with price holding at a key support zone within a broader declining structure. The move suggests a potential shift in near-term momentum, but the recovery remains tentative as the index approaches initial resistance. The reaction in the sessions ahead will be critical in determining whether this bounce can extend or if the broader downtrend resumes. 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 last month’s US Dollar Technical Forecast we noted that DXY had, “rallied into pivotal resistance with the index poised to mark the largest single-weekly advance since November of 2024. The focus is on inflection off this zone next week.” The index reversed the following week with a break lower in early-April extending nearly 3% off the yearly high.

Price rebounded off confluent support last week at the 61.8% retracement of the yearly range and the 2025 low-week close (LWC) at 97.50/65. The immediate focus is on a reaction off this mark with the bears vulnerable near-term while above.

Initial weekly resistance is eyed with the 52-week moving average (currently ~98.62) and is backed by the 61.8% retracement of recent decline and the January swing highs at 99.49. Key resistance remains unchanged at 100.16/42- a region defined by the yearly high-week close (HWC), the July high, and the 2024 low-week close (LWC) / low. A weekly close above this region is needed to fuel the next major leg of the USD advance.

Initial support rests with the yearly open at 98.24 and is backed by 97.50/65. Key support rests with the yearly low-week close (LWC) and the 2025 low-close at 96.88/98. A break / weekly close below this threshold would ultimately be needed to mark resumption of the broader downtrend and fuel the next major leg of the decline towards the yearly low 95.55.

 

Bottom line: U.S. Dollar has rebounded off confluent support with the index attempting to snap a three-week decline off the yearly high. From a trading standpoint, rallies would need to be limited to 99.49 IF price is heading lower on this stretch with a close below 97.50 needed to fuel the next leg of the decline.

Event risk is limited until next week with the highly anticipated FOMC rate decision and the Core Personal Consumption Expenditures on tap. Stay nimble into the releases and watch the weekly closes here for guidance. Review my latest US Dollar Short-term Outlook for a closer look at the near-term DXY technical trade levels.

Key US Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Weekly Technical Charts

• S&P 500, Nasdaq, Dow
• Australian Dollar (AUD/USD)
• British Pound (GBP/USD)
• Euro (EUR/USD)
• Swiss Franc (USD/CHF)
• Gold (XAU/USD)
• Japanese Yen (USD/JPY)
• Canadian Dollar (USD/CAD)
• Bitcoin (BTC/USD)

--- Written by Michael Boutros, Senior Technical Strategist

Follow Michael on X @MBForex