10.03.202514:04 Forex Analysis & Reviews: DXY – U.S. Dollar Index: Analysis and Forecast

The U.S. Dollar Index (DXY), which tracks the greenback's performance against a basket of major currencies, continues to face downward pressure. The declining trajectory has pushed the index toward its lowest levels since early November, around 103.40, confirming a break below the critical 200-day Simple Moving Average (SMA).

Weaker-than-expected U.S. employment data, released on Friday, have strengthened expectations of multiple Fed rate cuts this year, leading to further declines in Treasury yields. In addition, concerns over President Donald Trump's trade policies and their potential impact on U.S. economic activity are putting additional pressure on the dollar.

However, the Relative Strength Index (RSI) on the daily chart has dropped below 30, indicating oversold conditions, which calls for caution among bearish traders. This suggests that a short-term consolidation or a minor rebound could occur before further downside movement. If the dollar attempts a recovery and surpasses the key 104.00 level, it could be seen as a selling opportunity near 104.40.

Key Technical Levels to Watch

On the other hand, a break below 103.40 (November 2024 low) would be seen as a bearish signal, driving the index toward the 103.00 mark. Further declines could extend toward 102.50–102.45, before testing the psychological support at 102.00 and a deeper support zone at 101.80.

The table below illustrates the percentage change in the U.S. dollar against major currencies for the current month.

The U.S. dollar has shown the most strength against the Canadian dollar.