• DXY drifts lower for the second straight day and weakens below 101.00 on Thursday.
• The technical setup favors bulls and backs the case for the emergence of dip-buying.
• A convincing break below the 100.55 support zone will set the stage for further losses.

The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, extends the previous day's pullback from the 101.25-101.30 region and attracts some follow-through sellers on Thursday. The index touches a fresh weekly low during the first half of the European session and currently trades around the 100.90 area, down over 0.15% for the day.

From a technical perspective, the DXY is supported by the 23.6% Fibonacci retracement level of the May-June upswing and holds a constructive near-term bias above the 100.50 horizontal resistance breakpoint, which should act as a pivotal point. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator stays below zero with a negative reading at -0.09, hinting that bullish momentum is still tentative despite the supportive structure.

Furthermore, the Relative Strength Index (RSI) at 56.09 sits in neutral territory, suggesting moderate upside pressure rather than an overextended rally. This, in turn, suggests that a convincing break below the 100.55 resistance-turned-support should pave the way for deeper losses. The DXY might then weaken below the 38.2% level at 100.20, towards the mid-range support band around the 50.0% retracement at 99.72 and the 50-day SMA at 99.75.

A deeper pullback would expose secondary Fibonacci floors at 99.23 and 98.53, followed by the structural anchor near 97.65. On the topside, the next notable resistance emerges at the cycle high around 101.78, where a clear break would be needed to extend the broader bullish sequence.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

DXY daily chart