Dollar Index — Modest Rebounds Likely Before Renewed Downside Move

The dollar edged modestly higher on Monday as broader bearish momentum showed signs of fatigue following last week’s sharp losses.

A weekly close below the key psychological 100.00 level — which also aligns with the 61.8% Fibonacci retracement of the 89.15–114.72 uptrend — along with a brief drop beneath the broader range floor at 99.20, has triggered a fresh bearish signal. However, a sustained break below these levels is still needed to fully confirm the continuation of the downtrend, and in the meantime, some consolidation or a corrective bounce may be seen.

Long lower wicks on the daily candles over the past two sessions suggest buying interest on dips, but any rebound is likely to remain limited, with the broader sentiment still bearish and daily technical indicators firmly negative.

Strong resistance is expected at 100.00 and 100.30 (the psychological threshold and former lower boundary of the broader bearish channel), followed by 100.90 (the 38.2% Fibonacci retracement of the 104.29–98.77 leg and the April 3 swing low), which should cap any recovery attempts.

Interestingly, the dollar’s safe-haven status failed to deliver during the recent spike in global uncertainty. Instead, assets like the Swiss franc, Japanese yen, and euro absorbed the bulk of safe-haven flows, a reversal from what would typically be expected in periods of heightened geopolitical and trade tension.

This dynamic suggests the dollar is likely to remain under sustained pressure, as the escalating US-China trade conflict continues to overshadow President Trump’s temporary decision to suspend additional tariffs for 90 days.

On the macro front, weakening US fundamentals — with growing signs of a slowdown, increased recession risks, and rising expectations for three or four Fed rate cuts this year — should further weigh on the greenback in the coming months.

Res: 100.00; 100.30; 100.90; 101.23
Sup: 98.90; 98.68; 98.14; 97.81