U.S. Dollar Index drops below 99.1 as traders brace for U.S. retail sales data
The U.S. Dollar Index (DXY) is losing traction below the 100 threshold as technical exhaustion sets in and traders weigh key macro risks.
After Tuesday’s breakout above a short-term converging triangle pattern, the move stalled just before the psychological 100 level, topping out at 99.9 during late North American hours.
By Wednesday’s Asian session, DXY had reversed lower, sliding 0.7% to hit a session low of 99.0. The price drop broke below Tuesday’s low of 99.10 and shifted short-term sentiment back in favour of sellers. During the European session, the index recovered slightly to trade around 99.30, though still posting a mild daily loss of -0.46%.
DXY price dynamics (March 2025 - April 2025). Source: Tradingview
On the 4-hour chart, the 20-period EMA acts as near-term resistance at 99.7. Meanwhile, RSI has dipped to 37.8, a level typically associated with bearish control. If bearish pressure holds, the 98.50 support zone will come into view as the next likely target.
Trade policies weaken sentiment as traders brace for the U.S. retail sales print
Sentiment around the greenback is growing increasingly fragile as market participants continue to question the longer-term appeal of the dollar following erratic tariff-related announcements from President Trump. The lack of clarity in trade policy has clouded the outlook and made risk positioning more defensive.
Attention now turns to the U.S. Retail Sales data for March, due later today at 12:30 GMT. Expectations point to a sharp rebound of 1.3% versus the prior 0.2%, raising the stakes for intraday dollar volatility. A miss could accelerate downside momentum, while a strong surprise may help stabilise DXY just above the 99.0 handle. Until then, price action reflects hesitation rather than conviction.
The U.S. Dollar Index stayed stuck in a converging triangle pattern after falling below 100. Traders waited for a breakout, eyeing either a rebound to 100 or a drop toward 98.5.
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