USD Index extends losses amid rising rate-cut expectations and firmer gold prices

The dollar index extended its decline for a fourth consecutive day, continuing the pullback that followed its inability to decisively break the key psychological 100 level and a bear trap at the falling 200DMA, which now reinforces resistance.

Ongoing expectations for a Fed rate cut in December, driven by optimism that the US economy remains resilient and inflation pressures are unlikely to surge, alongside indications that the US government may reopen soon, continue to weigh on the greenback. Strengthening gold prices are adding further pressure.

Market participants remain cautious, awaiting the release of a series of US economic data once the government reopens, which is expected to provide clearer insight into the economy’s performance.

The dollar’s renewed weakness has pushed it below initial support at 99.51 (10DMA) and breached the 38.2% Fibonacci retracement of the 97.76/100.20 up-leg at 99.27, exposing the more critical 99.00 support zone (50% retracement / 20DMA / round number). A break below this level could trigger a broader reversal signal.

Technically, the daily chart shows a weaker outlook, with converging 5/10DMAs approaching a bear cross and positive momentum fading, though further downside action is needed for bears to regain firmer control.

In the near term, the bias remains lower as long as the price stays below the 10DMA.

Res: 99.51; 99.64; 100.00; 100.20
Sup: 99.00; 98.69; 98.34; 98.00