U.S. Dollar Index slips near 98.70 support amid bearish RSI and trade doubts
Dollar Index falls as renewed U.S.–China tensions weigh on sentiment.
The U.S. Dollar Index (DXY) started the final week of April on the back foot, reversing last week’s gains that hopes of easing U.S.-China trade tensions had fueled.
While U.S. officials spoke of ongoing "daily conversations" with China, Beijing refuted any active negotiations, warning again that a tariff war benefits no one. This renewed uncertainty has kept the dollar under pressure, dampening earlier optimism that global tariffs might ease.
Price action has mirrored this deteriorating sentiment. On the first trading day of the week, the DXY dropped by 0.7%, breaking below the lows of the prior two trading days and retesting key intraday support at 98.47. This move carved out a potential double bottom pattern at 98.47, but the broader context suggests underlying weakness rather than strength.
DXY price dynamics (April 2025). Source: TradingView
Today, April 29, the dollar opened at 98.62 and managed a brief rally to 98.90 during Asian hours. However, during European trade, it slipped back toward the 98.70 support zone. The inability to sustain gains reflects how broader fundamental concerns including fading multilateralism and prolonged uncertainty over trade agreements are weighing on market confidence.
Weakness in the U.S. dollar confirmed as DXY drops below key moving averages
Technical indicators further reinforce the bearish tone. Following yesterday’s decline, the 4-hour RSI shifted from bullish to bearish territory, now aligning with the daily RSI, which has been entrenched in bearish conditions for several days.
In addition, the dollar index price movement is now clearly below the 20- and 50-period moving averages on the 1-hour chart. These moving averages, which previously acted as support during the brief recovery, have now flipped into resistance. Hence, any sustained break below the 98.70 support zone would likely expose the DXY to further downside, first toward the double bottom at 98.47 and potentially extending toward a multi-year low below 97.50.
The DXY rebounded last week after hitting 97.50, lifted by easing tariff tensions and profit-taking. However, it stalled below 100 as traders anticipated Fed rate cuts in 2025.
