$USD (USDindex.FX)$ It is approaching the resistance of the upward trend and is expected to set a new annual high in the future. Traders should continuously monitor potential inflection points. The weekly support for the US Dollar Index lies at 108.09, 105.67, and 104.88 (key support), while resistance is at 110.25 (key resistance), 111.31, and 112.94.
The US Dollar Index rose by 0.7% last week, marking the third consecutive week of setting new annual highs. Although the broader technical outlook suggests that the US dollar remains constructive, the current rally is nearing the upward resistance level seen earlier this month, and the risk of the exchange rate rising to higher levels is increasing.
Notably, in last month's weekly USD outlook article, we noted that the US Dollar Index was approaching resistance near the 2001 low at 108.09, while emphasizing that "the price needs to close above this area on a weekly basis to maintain the possibility of continued reversal risks. In this scenario, the US Dollar Index could approach the annual high of 109.29 and the 78.6% Fibonacci retracement level from the 2001 decline at 110.25, with upside potential likely to persist in the coming days." The dollar broke through resistance in mid-August and maintained its upward trend after September opened, hitting a new high of 109.97 last week. Despite the broader outlook remaining constructive, we have observed divergence in momentum. Currently, the US Dollar Index has moved away from key resistance around 110.25.