US Dollar Index Price Forecast: Can DXY find support near 101.75 as bond yields decline?

Selling pressure persists in DXY for a third consecutive day as bond yields fall and hopes of diplomacy with Iran improve.
Further losses could be contained by geopolitical uncertainty and expectations of a Fed rate hike.
With the technical backdrop remaining constructive, buyers could emerge on dips to lower levels.

Selling pressure keeps the US Dollar Index (DXY) near the bottom of its weekly range on Friday, extending its post-FOMC pullback into a third consecutive day. The index, which measures the Greenback against a basket of currencies, is trading around 101.70-101.65 in the first half of the European session, a decline of around 0.20% on the day. With fundamental signals remaining mixed, DXY appears set to record a third successive weekly loss.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

A rush into safe-haven government bonds sent US Treasury yields sharply lower after disappointing tech earnings fuelled concerns over whether massive AI expenditure would generate sufficient returns. Renewed optimism about a diplomatic resolution to the Middle East conflicts has also weighed on safe-haven demand for the US Dollar (USD). Nevertheless, the geopolitical risk premium remains in place as hostilities intensify between Saudi Arabia and the Iran-backed Houthi group in Yemen, while the US and Israel threaten to resume attacks after the US midterm elections. Expectations that the US Federal Reserve (Fed) will raise interest rates again in December could provide additional support for DXY, potentially cushioning further declines.

The intraday break below the 23.6% Fibonacci retracement of the August-October advance gives bearish traders an advantage and points to scope for further weakness. A negative histogram and a move below zero in the Moving Average Convergence Divergence (MACD) indicator also suggest that upward momentum is easing. By contrast, the Relative Strength Index (RSI), hovering near 50 after earlier overbought readings, signals possible near-term consolidation rather than a clear reversal. Further declines could therefore encounter support at 101.28, the 38.2% retracement, followed by the 50% level at 100.77. The latter support is reinforced by the 100-day Simple Moving Average (SMA) at 100.66.

Should the pullback deepen, buyers would likely emerge near 100.26, the 61.8% retracement. A break below this support would bring the 78.6% level at 99.53 and the Fibonacci anchor at 98.60 into view. For an upward move, the first resistance lies at 101.91, the 23.6% Fibonacci retracement, ahead of a more substantial barrier near the cycle high around 103.00.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

DXY: daily chart

How Has the US Dollar Performed This Month?

The US Dollar (USD) recorded its strongest performance against the Euro this month. The table below sets out its percentage changes against the major currencies listed.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		1.26%	-1.10%	-0.02%	-1.86%	-1.17%	-0.23%	-1.64%
EUR	-1.26%		-2.33%	-1.29%	-3.09%	-2.42%	-1.47%	-2.85%
GBP	1.10%	2.33%		1.06%	-0.77%	-0.12%	0.88%	-0.46%
JPY	0.02%	1.29%	-1.06%		-1.86%	-1.17%	-0.15%	-1.58%
CAD	1.86%	3.09%	0.77%	1.86%		0.70%	1.73%	0.24%
AUD	1.17%	2.42%	0.12%	1.17%	-0.70%		0.96%	-0.41%
NZD	0.23%	1.47%	-0.88%	0.15%	-1.73%	-0.96%		-1.40%
CHF	1.64%	2.85%	0.46%	1.58%	-0.24%	0.41%	1.40%

Percentage movements between major currencies are displayed in the heat map. To read a currency pair, select the base currency in the left-hand column and the quote currency in the top row. For instance, choosing the US Dollar on the left and following that row across to the Japanese Yen gives the percentage change for USD (base)/JPY (quote) in the corresponding cell.