The USD has fallen, which matches a drop in UST yields. The DXY was at 100.75. Recent US data showed weak retail sales, the largest decline in PPI in five years, and lower industrial production and manufacturing reports. Now, all eyes are on upcoming data, including import/export price indexes, housing starts, building permits, and Michigan sentiment. If these reports continue to show weak numbers, the USD could be under even more pressure. The bullish momentum seems to be fading as RSI levels drop, indicating a slight risk of decline.

Support and Resistance Levels

Support is at 99.90 and 99.00, while resistance is at 100.80, 101.60, and 102.60. This information is for informational purposes only and should not be treated as investment advice. It’s important to do thorough research before making any investment decisions since open market investments come with risks. The recent drop in the US dollar coincided with lower yields on US Treasuries, signaling a broader cooling in market expectations regarding economic growth. The Dollar Index’s value of 100.75 shows declining confidence. This decline is driven by disappointing US economic data, including weak retail sales, the Producer Price Index falling at the fastest rate in five years, and reduced output in both industrial and regional manufacturing. Traders should closely watch the next set of economic indicators, including trade pricing data, housing activity through starts and permits, and consumer sentiment from Michigan. Weak results could reinforce recent trends and put more pressure on the USD. Given the recent changes in critical metrics, we should observe whether these trends indicate a broader slowdown or are just noise amid uncertainty. From a technical standpoint, the recent downturn has limited near-term upside potential. The Relative Strength Index shows decreased momentum, suggesting less appetite for further gains. In simple terms, this opens the door for short-term weakness.

Tactical Market Stance

We see support levels at 99.90 and 99.00. If prices drop below these levels, we may face further declines. On the other hand, to regain an upward trend, we need strong moves above 100.80, and potentially reaching 101.60 or 102.60. Without these movements, any rebounds might be brief. Given this situation, it’s important to stay alert and responsive to data. Overreacting to single data points can be risky in tactical positioning, especially in sensitive market environments. Prices are shifting rapidly based on small surprises, and we need to consider whether this trend will continue or come to an end. We recommend a tactical approach, focused on the short term and remaining flexible. Keep risk close and monitor correlations across FX, rates, and volatility. This market reacts quickly to changes, and these kinds of situations don’t always resolve smoothly. In the coming weeks, we need to balance being reactive without becoming too mechanical. If yields stay stable but data continues to decline, further weakness in the dollar is likely. However, even small improvements in upcoming figures could cause a quick reversal, especially around resistance points that remain somewhat high. In this situation, reactions are more important than baseline levels. Create your live VT Markets account and start trading now.

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