Can anything shut down the Gold rally?
The DXY closed at 97.72, with an intraday high of 97.95 and a low of 97.60. The index remains locked in a prolonged consolidation phase following months of downward pressure, with limited evidence of a reversal so far.
Key Technical Observations
Moving Averages Flat:
The 15-day moving average (97.60) and 20-day moving average (97.59) are almost overlapping, reflecting a lack of clear directional momentum. The short-term trend remains neutral with a mild bearish undertone.
Trend Structure:
The index continues to form lower highs and flat lows, suggesting distribution rather than accumulation. The broader structure still aligns with a medium-term downtrend from the 107–110 zone.
RSI Neutral:
The RSI stands at 49.14, hovering near the midline. This indicates balance between buyers and sellers, but with no strong momentum to break out of the range.
Compression Phase:
Price volatility has declined, forming tighter candles — a sign of indecision that often precedes a breakout or breakdown. A move below 97.50 could reignite bearish pressure.
Macro & Market Context
Fed Policy Reassessment:
Markets remain cautious as the Fed signals potential rate stability or cuts later in the year, keeping USD upside capped.
Risk Sentiment:
Global risk appetite is improving, with equities and emerging market currencies firming — typically bearish for the dollar index.
Yield Differentials:
Lower U.S. Treasury yields continue to weigh on USD demand compared to higher-yielding counterparts like the euro or pound.
Key Levels to Watch
- Immediate Resistance: 98.00 – confluence of the short-term moving averages.
- Next Resistance: 99.30 – upper range boundary.
- Immediate Support: 97.50 – short-term floor.
- Breakdown Support: 96.00 – if downside momentum accelerates.
Bias: Neutral-to-Bearish
While the DXY is showing signs of base-building, there’s no confirmation of bullish reversal yet. A break below 97.50 would likely trigger renewed selling pressure, while reclaiming 98.50–99.00 could mark early signs of stabilization.
Caution remains warranted — the index’s flat structure and mid-range RSI suggest waiting for a confirmed breakout. A daily close above 98.00 would strengthen a short-term bullish case, but breaks below 97.50 may reassert downside momentum, favouring long EUR/USD and GBP/USD setups in the near term.
