Is the US Dollar Index Set for a Pause?

Following the recent Federal Reserve meeting, where expectations for 2025 interest rate cuts were adjusted from three to two, the US Dollar Index surged by approximately 1.28%. But what are the technical scenarios shaping its next moves?

On the daily chart, the US Dollar Index remains in an overall uptrend, recently hitting a higher peak at 108.071. The daily trading range lies between 108.539, marking the higher high and resistance level, and 105.420, the higher low and support level. Traders might watch for a pullback near 106.015 before a potential continuation of the long-term uptrend.

On the 4-hour chart, the index is experiencing a general downtrend, forming a new bottom. A rise to 108.276 could face selling pressure, possibly leading to a continuation of the downward move. Key targets for this downtrend include 107.784 as the first level and 106.086 as the longer-term target.

However, the negative outlook on the 4-hour chart becomes invalid if the price breaks above 108.539, forming a new higher peak.

In summary, the downtrend on the 4-hour chart appears to be a corrective wave within the broader uptrend seen on the daily chart.