US Dollar Index: Does the Double Top Breakdown Confirm Further Downside?

The US Dollar Index () remains under intense selling pressure after decisively breaking below both its key moving average and the ascending trendline that had supported price action since mid-July, confirming a shift in short-term momentum from bullish to bearish.

The chart also shows the index losing the 61.8% Fibonacci retracement level around 101.02 before extending its decline sharply toward the 99.67 area. This price action underscores the dominance of sellers and accelerating liquidation, while technical signals continue to show little evidence of a meaningful bullish reversal at this stage.
 
Meanwhile, the Stochastic oscillator is hovering near oversold territory, increasing the likelihood of a short-term corrective rebound in the coming sessions. However, in my view, any recovery is likely to remain limited as long as the US Dollar Index (DXY) trades below the 100.20–100.50 resistance zone, which aligns with the 50% Fibonacci retracement level and represents a key technical barrier.

As a result, any rally into this area could attract fresh selling interest, particularly as the key moving average has now turned into strong dynamic resistance, reinforcing the prevailing bearish momentum.

Should buyers fail to defend the immediate support around 99.50, bearish momentum is likely to accelerate, paving the way for a move toward 98.85, the next major technical target based on the current price structure.

Conversely, if the index holds above this support and begins forming a higher low alongside improving momentum indicators, a corrective rebound toward 100.20 and then 100.50 could unfold. Nevertheless, such a recovery would remain corrective in nature unless the index reclaims and sustains trading above 101.20, where the broader technical outlook would begin to shift back in favor of the bulls.

Support: 99.50 – 99.00 – 98.85
Resistance: 100.20 – 100.50 – 101.20

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