The U.S. greenback index (DXY) held regular on Monday after hitting a three-year low final week, because the dollar is on monitor for its worst first half since 2002.

The index has confronted downward pressure this year as buyers have raised considerations over the outlook for the U.S. economic system and America’s position inside the world monetary system amid Washington’s unpredictable tariff policies.

The U.S. dollar index, which measures the efficiency of the dollar in opposition to a basket of foreign exchange, has has misplaced almost 10% of its worth for the reason that begin of the yr. The index fell lower than 0.1% on Monday to round 98.15, after dropping as little as 97.60 final Thursday, its lowest degree since February 2022.

Under, we take a better take a look at the U.S. greenback index weekly chart and use technical analysis to determine essential ranges that buyers will doubtless be watching.

Bearish Flag Sample Breakdown

After breaking down beneath a descending triangle in early April, the U.S. greenback index shaped a bearish flag sample, indicating a continuation of its robust downtrend.

Certainly, promoting resumed after the index broke down from the flag late final month, probably setting the stage for additional downside. Nevertheless, whereas the relative strength index confirms bearish value momentum, it sits simply above oversold ranges, an space that has coincided with main upswings on a number of events.

Let’s determine two essential support levels on the U.S. greenback index to look at and in addition level out overhead areas value monitoring throughout future restoration efforts.

Essential Assist Ranges to Watch

Additional promoting may see a drop towards 95. This space would doubtless present assist close to a trendline that hyperlinks a spread of outstanding peaks and troughs on the chart between November 2017 and January 2022.

A decisive shut beneath this degree may set off a steeper decline to round 90. These who trade the index might search for shopping for alternatives close to main lows that shaped on the chart within the first half of 2021, which additionally intently correspond with a consolidation interval positioned simply above the February 2018 trough.

Apparently, this space additionally roughly aligns with a projected bars sample goal that takes the index’s robust downtrend that preceded the bearish flag and repositions it from the sample’s breakdown level, offering clues as to how a draw back continuation transfer might play out.

Overhead Areas Value Monitoring

Throughout upswings, buyers ought to initially monitor the 101 degree. This space on the chart would doubtless present vital overhead resistance close to the descending triangle’s decrease trendline and a sequence of highs located barely beneath the March 2020 peak.

Lastly, an in depth above this degree may see the U.S. greenback index climb towards 107, an space the dollar might expertise promoting stress on the chart close to outstanding peaks in October 2023 and November final yr.

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As of the date this text was written, the creator doesn’t personal any of the above securities.