US Dollar Index (DXY) Forecast: Facing Downward Pressure Below 99.60

The US Dollar Index (DXY) slipped into the lower 99.00 range as improving risk sentiment reduced demand for the safe-haven currency. Market confidence strengthened on Monday following reports of a US-Iran agreement aimed at ending the conflict. From a technical perspective, the DXY has broken below the lower boundary of its ascending channel, signaling increasing downside pressure.

The US Dollar (USD) started the week under pressure as improving market sentiment reduced demand for safe-haven assets following reports of a peace agreement between the United States and Iran. The US Dollar Index (DXY), which tracks the Greenback against a basket of major currencies, continued its pullback from last week’s peak and fell to a new 10-day low near 99.30.

Market participants responded positively to news of a memorandum of understanding between Washington and Tehran aimed at ending the 100-day conflict and restoring access through the Strait of Hormuz. While details of the deal remain limited, investors have reacted with cautious optimism, leading to lower US Treasury yields and a weaker Dollar, while risk-sensitive assets attracted stronger demand.

Technical Analysis: DXY Falls Back Below Channel Resistance

The US Dollar Index (DXY) is hovering near 99.50 at the time of writing, maintaining a bearish short-term outlook after slipping below the lower boundary of its ascending channel. Technical indicators continue to favor the downside, with the 4-hour Relative Strength Index (RSI) falling beneath the 40 mark and the Moving Average Convergence Divergence (MACD) remaining in negative territory, both pointing to fading bullish momentum.

Despite the bearish bias, sellers have so far struggled to push the index below the intraday low of 99.38. A break beneath this level could pave the way for a decline toward the June 4–5 lows around 99.15, followed by the late-May support zone near 98.75.

On the upside, the area around 99.65—where the former channel support intersects with a previous support zone marked by the June 9, 11, and 12 lows—is expected to act as strong resistance. A decisive recovery above this barrier could open the door to the key psychological level at 100.00, with the June 11 high near 100.30 becoming the next target.