Dollar slides amid rising rate cut expectations and weak US economic data

The dollar index came under renewed pressure on Monday, falling to a two-week low as bets for a Fed rate cut in December gained traction. Market participants are awaiting key US labor data, which could influence the central bank’s policy decision.

Today’s report showed that the US manufacturing sector contracted for the ninth consecutive month, weighed down by higher tariff-driven costs and a significant drop in new orders, adding further pressure on the greenback.

Daily technical indicators weakened, with the 14-day momentum remaining in negative territory. The price slipped below the broken 200-, 20-, and 10-day moving averages, approaching a key support at $98.85 (Nov 14 higher low), where stronger downside risks may emerge, as the stochastic is oversold.

Any limited rebounds are likely to remain capped below the 200DMA (99.43), maintaining the bearish near-term bias and offering better levels for fresh short positions.

A recent bull-trap near the $100 level and initial signals of a reversal pattern forming on the monthly chart reinforce the negative scenario. However, a decisive break below the $98.85–$98.60 zone (Nov 14 low / 55DMA / Fibo 38.2% of $95.82–$100.31 rally) is required to confirm a daily chart reversal and open the path for further retracement of the $95.82–$100.31 rally.

Res: 99.25; 99.43; 99.70; 100.00
Sup: 98.85; 98.60; 98.34; 98.07