Federal Reserve rate hike bets reduced: USD/UZS support levels in focus

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US Dollar vs Som slides 0.56% today

Highlights

The U.S. dollar weakened against major currencies as softer economic data shifted expectations for future Federal Reserve rate hikes.
Elevated oil prices and ongoing Middle East geopolitical tensions added to overall market uncertainty and fragility.
USD/UZS trades below key moving averages with multiple sell signals, projecting a high probability for a move to UZS11,677 to UZS11,794 over the next 1 to 3 days.

Dollar demand wanes as Fed expectations and geopolitical risks shift

The U.S. dollar has recently lost ground to major currencies as softer economic data, including declining retail sales and job losses, has prompted traders to reassess the likelihood of further Federal Reserve rate hikes. This shift in monetary policy expectations has lessened immediate demand for the dollar, contributing to pressure on the USD/UZS pairing. Additional background factors such as elevated oil prices and ongoing geopolitical tensions in the Middle East have further heightened market fragility, according to Economictimes Indiatimes.

Technical resistance tested as mixed momentum signals dominate

USD/UZS is trading below the MA-20 (UZS11,788) and MA-50 (UZS11,816) on the H1 chart, and remains under the MA-200 (UZS12,088) on the daily timeframe. The Ichimoku Kijun level at UZS11,784 forms immediate technical resistance, while the intraday low sits near UZS11,735. Momentum indicators are mixed: MACD signals strong sell, RSI stands at 44.4 triggering a sell, Stoch RSI and CCI both confirm a strong sell bias, while ADX alone still shows trend strength on the buy side. Bull/Bear Power suggests intraday buyers maintain some presence, but volatility remains contained at low levels.

Downside risk prevails as volatility band caps reversal chances

Over the next 1–3 trading days, USD/UZS is expected to trade within a typical volatility band defined by UZS11,677 on the downside and UZS11,794 as upper resistance. The probability of an upward breakout remains very low, with downside continuation holding a much higher likelihood. The baseline scenario is for price to drift sideways within this corridor. A decisive break above UZS11,784 could trigger a short-term reversal attempt, while sustained trading below UZS11,677 would reinforce the prevailing downtrend.

Viktoras Karapetjanc, expert at Traders Union, sees recent USD weakness as a direct result of shifting Federal Reserve expectations and broader global uncertainty. He notes that fundamentals remain the main driver as traders reduce dollar demand amid soft U.S. economic data. Technical signals confirm a cautious tone, but momentum for further downside appears limited for now. Karapetjanc remains watchful for any reversal above UZS11,784 over the short term. "If USD/UZS holds above immediate support zones, I expect the pair could recover modestly, but the fundamental environment still tips the odds towards a flat-to-lower short-term profile."

Earlier, analysts noted that USD/UZS was entrenched in a bearish trend amid persistent downside momentum and technical weakness. This view is reinforced by current price action and mixed momentum signals, with traders advised to closely monitor the UZS11,677 support as a decisive break below this level could accelerate further declines.

Source of Data: USD Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.