- The U.S. dollar index lost grip and fell to 105.53 today.
- They wait to see how that support level holds at 104 or if it breaks lower.
- A shift below 104 would likely move DXY to 103 in the next few days.
Now, it’s down to 105.53, the U.S. Dollar Index (DXY), indicating increased selling pressure on global markets. Further inferior price action is expected down near 104.00-104.50. Earlier in the session, the index reached 106.65 but lost momentum, with current sellers pushing toward the marked support range. The downward trend follows a failed attempt to sustain gains above 107.00, reinforcing the bearish outlook as risk-on sentiment dominates financial markets.
The clear rejection from previous highs is shown with price action within DXY since setting new overall lower highs from mid-February. The red descending trendline, which once acted as resistance, has now practically turned into a critical pivot area. The boxed support zone around 104.00 represents a key demand area where buyers may step in to slow the decline. If this level fails to hold, DXY could extend losses toward 103.00, marking its lowest level in months.
Market Sentiment and Risk Appetite
The dollar is now a secondary choice for future international trade transactions as risk-on assets gain ground. The stock market and the crypto sector’s strength in attracting funds typically indicate capital rotating from safe havens such as DXY into riskier instruments. Consequently, some traders are quite bullish, where much of the short dollar position reflects an increase in weaknesses towards the dollar. The broader trend reveals that most bear pressure will work while DXY remains below 106.00.
In a few trading sessions henceforth, it will be revealed whether DXY can hold the support range of 104.00-104.50. A break of this level could lead to a speedier sell-off toward the level of 103.00 and beyond. However, if buyers come in at this range, there is even a possibility of a brief rebound toward 106.00. All eyes are, however, currently on the strength of this key support level and whether dollar declines can be expected to continue over the coming weeks.
