DXY: Dollar Index Lingers Near Major Long-Term Support. Can Bulls Hold the Line?

Technicians — this one’s for you. The greenback is staring down a three-year low and if it breaks it, this may mean a whole new chart for charting.

💵 Dollar Seeks Support in Three-Day Slide

• The US dollar index DXY slipped again Wednesday, marking its third straight day in the red as the greenback lost further ground against major peers.
• At 97.70, the index, measuring the buck’s strength against six other currencies, now sits right on the doorstep of major long-term support — 97.60, a level not touched since March 2022. This is the level everyone’s watching.
• A clean break and close below 97.60 could mark a decisive shift in dollar momentum and potentially kick off a new bearish trend for the first time in years. Bulls know the stakes here — and are clinging to the hope that this key level holds. And it came quickly — the dollar’s down roughly 10% so far this year.

⏰ Can You Time the Cuts?

• Fed Chair Jay Powell’s testimony to Congress continues to hover over dollar sentiment. While he confirmed the Fed’s intention to deliver more cuts this year, the top central banker also made clear that timing remains data-dependent.
• “We’ll get an inflation report well before the July meeting. We will continue to adapt to the evolving situation as we’ll continue to be doing,” Powell said. But he also gave us all a glimmer of hope (well, not you dollar bulls), adding that if inflation stays on a downward trajectory, “we’ll get to a place where we can cut rates sooner rather than later.”
• With only four meetings left in 2025, the window for the Fed to act is shrinking. Traders are increasingly confident that cuts could begin as early as September (some overly optimistic ones are calling for a July cut) — an outlook that’s adding downward pressure on the dollar.

🛒 Major Pairs Break Out

• As the dollar weakens, major rivals are flexing. The EURUSD blasted through resistance to hit a fresh three-year high at $1.1650, buoyed by diverging rate paths and cooling US inflation. The ECB is out there cutting like there’s no tomorrow.
• The GBPUSD wasn’t far behind, climbing to its own three-year high at $1.3650, supported by stabilizing UK outlook and hopes for growth resilience despite recent GDP wobbles.
• Across the board, dollar weakness has ignited broad-based rallies in currencies, commodities, and risk assets. But for technicians, it’s still all about 97.60 — the make-or-break level that could set the tone for the second half of the year.