Dollar Index Tests Support as Event Risk Looms
The US Dollar Index is testing support at the August high-day close and May low at 98.68/69, according to City Index UK's weekly technical outlook.
A break or daily close below the lower parallel of the July pitchfork would be needed to mark downtrend resumption, with key support objectives eyed at the yearly open at 98.24 and the 61.8% retracement of the yearly range at 97.94.
On the other hand, initial resistance is eyed at the 200-day moving average near ~98.17, which converges on the median-line this week. A breach or daily close above this slope would suggest a more significant near-term low is in place, and a larger recovery is underway within the July downtrend.
The focus shifts to event risk, with Treasury Secretary Bessent's expected announcement on Iran sanctions today, followed by Wednesday's Core PCE report, and Friday's keynote address at Jackson Hole by Fed Chair Kevin Warsh. These events could drive volatility in Treasury yields and the US dollar.