Title: US Dollar Technical Forecast – Greenback Stalls at Key Resistance but Long-Term Outlook Holds Firm
Original Source: Forex.com – Written by Michael Boutros
Original Article Link: US Dollar Technical Forecast – USD Rebound Rejected at Resistance (August 8, 2025)
URL: https://www.forex.com/en-us/news-and-analysis/us-dollar-technical-forecast-usd-rebound-rejected-at-resistance-8-8-2025/
Author: Michael Boutros, Senior Technical Strategist at FOREX.com
Overview
The US Dollar (USD) has experienced a short-term pullback following a notable rally over recent weeks. While the long-term trend for the dollar remains upwardly biased, this temporary rejection at a key resistance level has captured the attention of forex traders, analysts, and investors. As of early August 2025, the greenback has paused its ascent, raising questions about its near-term sustainability while longer-term bullish setups remain intact.
Michael Boutros highlighted this in the August 8, 2025, technical forecast that pointed out the dollar’s struggles around significant resistance zones. The pullback could represent nothing more than a simple correction before a broader continuation of the dollar’s strengthening trend.
Price Action Recap
The US Dollar Index (DXY) has been one of the standout performers in 2025. Driven by firm US economic performance, a resilient labor market, and expectations of Federal Reserve policy tightening, the dollar has pushed to multi-month highs. However, the rally recently lost momentum right at a key technical resistance at 106.53, roughly a 61.8% Fibonacci retracement of the 2022-2023 decline.
Technical Analysis (as of early August 2025)
According to Michael Boutros and additional independent chart analyses, several significant technical aspects are defining the current US Dollar outlook:
Key Levels:
Support:
– 104.62 – 38.2% Fibonacci retracement of the March 2023 to May 2025 range
– 103.75 – Weekly low support area
– 102.85 – Confluence level reached during previous consolidations
Resistance:
– 106.53 – 61.8% Fibonacci retracement of the 2022-2023 top-to-bottom
– 107.20 – June 2024 pivot high
– 109.10 – Monthly resistance zone
Technical Indicators:
– RSI (Relative Strength Index): The weekly and daily RSI indicators are both pointing to stretched conditions, with the daily RSI peaking near 70 before cooling off back to the 60-65 range.
– Price Action Behavior: Recent candles indicate potential exhaustion, with upper wicks suggesting resistance holds strong.
– Moving Averages: Price action is still trading above the 50- and 200-day moving averages, which typically indicates that the primary trend remains bullish.
Trend Analysis
The broader USD trend remains upward following a strong bullish reversal in early 2025, but the recent pivot at 106.53 serves as a cautionary signal for those betting on uninterrupted bullish momentum.
What this means for traders:
– Possible retracement to the 104.50–104.60 region may offer re-entry opportunities for dollar bulls.
– If support breaks below 103.75 and sustained declines follow, it could lead to deeper corrections towards the 102.85 zone.
– A confirmed breakout above 106.53 and subsequent hold could re-open the path to challenge the 107.20 and even the 109.10 level.
Fundamental Drivers Supporting USD Strength
Even as technical resistance caps immediate upside, the dollar’s strength is fundamentally supported by several macroeconomic elements:
Federal Reserve Policy Outlook:
– The Federal Reserve remains committed to a hawkish stance while other global central banks have begun signaling easing cycles.
– Inflation in the US has remained persistently above the Federal Reserve’s 2% target, prompting policymakers to avoid premature rate cuts.
– As of
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