The U.S. greenback index (DXY) hit a three-year low Monday amid investor issues about tariffs, the financial outlook and doable threats to Federal Reserve independence.

President Trump on Monday ramped up his criticisms of Fed Chair Jerome Powell and demanded that the central financial institution minimize charges instantly. The newest feedback got here after Trump last week said Powell’s «termination can’t come quick sufficient,» whereas White Home financial advisor Keven Hassett stated the president is evaluating methods to probably dismiss Powell.

Traders worry {that a} transfer by Trump to take away Powell earlier than the top of the Fed chief’s time period in Might 2026 might undermine confidence in the U.S. dollar and the nation’s dominant function in international monetary markets.

The U.S. greenback index, which measures the efficiency of the buck towards a basket of foreign exchange, has declined about 5% since early April and slumped round 9% for the reason that begin of the 12 months amid uncertainty surrounding the Trump administration’s commerce insurance policies. The index was at 98.32 late Monday, buying and selling at its lowest ranges since March 2022.

Beneath, we break down the technicals on the U.S. greenback index weekly chart and determine essential ranges price watching out for amid the potential for additional news-driven volatility.

Bull Entice Confirms

After breaking out from a descending triangle final October, the U.S. greenback index rallied for a number of months however bumped into promoting stress because it approached its 2022 excessive. Since that point, the index has trended sharply decrease, just lately falling under the sample’s decrease trendline to substantiate a bull trap, a buying and selling occasion that lures buyers into shopping for earlier than the market makes a sudden reversal to trigger losses.

Nevertheless, whereas the relative strength index (RSI) confirms bearish momentum, the indicator has moved into oversold territory, growing the chance of near-term bounces.

Let’s determine essential support and resistance ranges on the U.S. greenback index chart that buyers could also be monitoring.

Essential Assist Ranges to Watch

The primary decrease degree to look at sits round 95. The index might appeal to shopping for curiosity on this space close to a horizontal line that connects a number of peaks and troughs on the chart between October 2017 and January 2022.

A extra important transfer decrease might see the index revisit decrease help at 90. Traders might search entry points on this location close to two outstanding swing lows that developed on the chart within the first half of 2021, previous a 15-month bull run.

This space additionally sits within the neighborhood of a projected measured transfer downside goal that calculates the space of the descending triangle close to its widest level and deducts that quantity from the sample’s decrease trendline.

Key Resistance Ranges to Monitor

Throughout upswings, it’s price intently monitoring the important thing 101 degree. Countertrend rallies to this space would probably face promoting stress close to the descending triangle’s decrease trendline, which can flip from a area of prior help into future resistance.

Additional upside might spark a transfer to round 107. Tactical merchants who’ve gathered positions within the U.S. greenback index at decrease ranges might resolve to lock in profits right here close to the notable October 2023 swing high, which additionally intently aligns with a minor peak that fashioned on the chart final November.

The feedback, opinions, and analyses expressed on Investopedia are for informational functions solely. Learn our warranty and liability disclaimer for more information.

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