**U.S. Dollar Technical Outlook: Dollar Rebound Rejected at Resistance**
*By James Stanley*
*Original source: FOREX.com – Published August 8, 2025*
(Paraphrased and expanded for context and clarity, credit: James Stanley)
The U.S. Dollar (USD) has had a turbulent few weeks, driven by a mix of economic releases, central bank speculation, and technical dynamics. After rebounding in late July and into early August, the greenback hit a significant technical resistance level and gave back a portion of its recent gains. This price action has led traders and analysts to reconsider short-term bullish expectations, particularly given evolving macroeconomic headwinds and expectations around Federal Reserve policy.
This article reviews the technical state of the U.S. Dollar across major pairs and dives into the implications for USD performance in the coming weeks.
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## Overview: U.S. Dollar Momentum Stalls at Resistance
The U.S. Dollar Index (DXY), which tracks the value of the greenback against a basket of major currencies, has encountered stiff resistance near the 104.00 handle. After carving out multi-week support around 102.50 in late July, the DXY rallied sharply, climbing more than 1.5% in less than two weeks. Much of this strength was built on the back of Federal Reserve optimism and stronger-than-expected economic data in the U.S., including robust nonfarm payroll numbers and consumer spending resilience.
However, as the rebound reached a critical area of historical resistance, the price action began to fade.
### Key Highlights:
– The U.S. Dollar Index encountered resistance at the 103.80–104.00 region.
– A failed breakout attempt at that level has led to a pullback, casting doubt on near-term bullish continuation.
– Technical structure suggests a consolidative or potentially bearish directional bias if bulls cannot regain upward momentum.
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## Technical Analysis: DXY and Major USD Pairs
### DXY (US Dollar Index)
– **Resistance Zone:** 103.80–104.00
– This area has historically acted as both support and resistance over the past year.
– Sellers appear to be defending this level aggressively.
– **Support Levels:**
– Immediate support around 102.80.
– Key structural support sits at 102.00–102.50.
– **Moving Averages:**
– Price is hovering near the 200-day simple moving average (SMA), a long-term trend indicator.
– The 50-day SMA is beginning to flatten, suggesting a loss of bullish momentum.
If DXY breaks below the support zone around 102.50, a bearish continuation could be in play, potentially pushing the index toward the 101.50 region.
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### EUR/USD
The Euro has remained surprisingly resilient despite the recent dollar rebound. EUR/USD fell sharply from 1.1050 to near 1.0900, yet buyers re-emerged above the 1.0850 support level. This can be explained partly by fading optimism around Fed rate hikes and recent chatter from the European Central Bank (ECB) signaling continued policy vigilance.
– **Resistance Levels:**
– 1.1000 psychological round figure.
– 1.1050, a multi-month swing high formed in July.
– **Support Levels:**
– 1.0850, which has been tested multiple times since June.
– A break below 1.0850 could expose 1.0750.
The pair is trapped in a consolidation range, but the broader bullish trend remains intact as long as support holds.
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### GBP/USD
Sterling continues to trade range-bound despite broader dollar movements. A robust Bank of England policy stance and relatively resilient economic data from the UK have helped the pound hold its ground.
– **Resistance:**
– 1.2800, aligned with the downward-sloping trendline from July
Read more on USD/CAD trading.