Technical Analysis
- Price is trapped between:
- Support zone at ~99.50–100.00, previously defended during the late April bounce.
- Resistance at the 50-day MA (101.60) and confluence zone up to 102.50, where multiple rejection wicks occurred.
- Moving averages remain inverted, with the 50-day below the 200-day — “death cross” configuration.
- The pivot at 100.643 has turned into a near-term ceiling.
Adaptive Momentum Oscillator (AMO): Bearish Reversal Signal
- The AMO has crossed bearishly with:
- Histogram turning red
- Black signal line > red AMO line = momentum is decaying
- This shift follows a brief positive momentum wave, which now appears to have topped out
This is the first red histogram since April, and it’s emerging near resistance.
Scenarios
🟢 Bull Case (Less Likely Short-Term)
- DXY reclaims 100.64 and climbs above 101.60
- Confirmed breakout above 102.50 opens the door to:
- 103.36 (R1)
- 104.60 (200-day MA)
Catalysts: Hot inflation surprise, stronger U.S. growth, Fed re-hawkishness
🔴 Bear Case (Favored Short-Term)
- Breakdown below 99.50 opens downside toward:
- S1 at 96.91
- Further major structural support at 95.00 area
Catalysts: Weak economic data, risk-on flows, further Fed cut pricing, strong euro or yen
Macro Narrative Driving the Dollar
- U.S. economic data has cooled modestly in May, reinforcing dovish repricing for the Fed.
- Eurozone & China macro surprises have improved recently, reducing dollar demand.
- Geopolitical and safe-haven flows remain muted, removing support for DXY.
- Gold’s and Bitcoin’s outperformance suggest real asset rotation away from the dollar.
The DXY remains rangebound but vulnerable. It’s failing to sustain upside momentum, with both the price action and AMO suggesting downside pressure.
Unless bulls can recapture 101.60 quickly, the most probable path is a revisit to 99.50, and possibly lower into the mid-96s.
