The USD experienced a decline, aligning with a decrease in UST yields. The DXY was recorded at 100.75 levels. Recent US data showed softer retail sales, the largest dip in PPI in five years, and weaker industrial production and empire manufacturing data.
Attention now shifts to forthcoming data, including the import/export price index, housing starts, building permits, and Michigan sentiment data. A continuation of weaker-than-expected figures could further pressure the USD. The bullish momentum appears to wane with RSI levels easing, suggesting a slight downside risk.
Support And Resistance Levels
The support level is identified at 99.90 and 99, while resistance is noted at 100.80, 101.60, and 102.60. The information presented serves informational purposes only and should not be taken as investment advice. Thorough research is advised before making investment decisions, given the inherent risks in open market investments.
The recent dip in the US dollar coincided with falling yields on US Treasuries, which suggests a broader cooling in market expectations around economic momentum. The Dollar Index came in at 100.75 — a level that reflects weakening confidence. A wave of soft US macroeconomic releases has driven this, including markedly subdued retail sales activity, a Producer Price Index falling at its fastest pace in half a decade, and decreasing output on both industrial and regional manufacturing fronts.
Traders should now keep a close eye on the next batch of economic indicators. These include trade pricing data, housing activity through starts and permits, and consumer sentiment from Michigan. Weak readings in these could amplify recent trends, placing further pressure on the greenback. Given the scale of the recent shifts in key metrics, it would be wise for us to monitor whether these are reflective of a wider cooldown or simply noise around an uncertain path forward.
Technically, the recent downward move has narrowed near-term upside potential. Momentum, as inferred by the Relative Strength Index, has eased, pointing to a diminishing appetite for further gains. This, in simple terms, opens the door to short-term weakness.
Tactical Market Stance
We’re looking at support levels down at 99.90 and 99.00—if price action dips below those, we risk further retracements. On the flip side, to regain upward structure, moves above 100.80, then possibly 101.60 or even 102.60, would need to materialise with conviction. Without that, any bounces may be short-lived.
Given this setup, it’s essential to remain alert and data-dependent. Overreaction to single data points can be harmful in tactical positioning, especially in rates-sensitive environments like this. Prices are adjusting rapidly in response to marginal surprises, and we should be asking whether that pattern continues or finally exhausts itself.
We favour a tactical stance, short-term in focus, and nimble. We should keep risk tight and watch correlation clusters closely across FX, rates, and vol structures. This is a market responding to shifts quickly, and situations like this don’t always unwind cleanly. In the coming weeks, the balance lies in being reactive without becoming mechanical about it.
If yields remain quiet but data continues sliding, further softness in the dollar remains a plausible path. That said, even minor beats in upcoming figures could prompt a quick reversal, particularly around resistance thresholds that remain moderately elevated. It’s a space where reactions matter more than baselines.
