Dollar Index Analysis: Support and Resistance Levels to Watch on Recent Bullish Recovery

USDX Technical Outlook – 9 January 2026

In this analysis, Ultima Markets examines the U.S. Dollar Index (USDX), highlighting key technical levels and potential scenarios across multiple timeframes as the index tests a critical turning point.

USDX Daily Chart Overview

The USDX has mounted a strong short-term recovery after sharp declines through late November and December. However, the broader trend remains neutral to bearish, as reflected by the downward-sloping term moving average (green line).

Price is now approaching an important decision zone, where bullish momentum is running into a medium-term resistance near the black moving average. From here, traders are presented with two potential strategies.

Momentum Approach

A decisive daily break above 98.80 could justify long positions, with upside potential toward 99.40.

More Cautious Approach

Waiting for a pullback toward the 98.20 area (purple moving average) may provide confirmation of renewed buying interest and a more attractive risk-to-reward profile.

Key Levels

Resistance

The 98.70 - 98.89 level is the immediate resistance zone, aligning with the black moving average and early December congestion. 99.40 would be the secondary resistance near the green moving average / 200-day EMA, representing a full retracement of the recent decline. The 100.20 - 100.38 is the major structural resistance from mid-November highs, which would signal a broader trend reversal if cleared.

Support

The 98.20 level represents the initial support at the purple moving average. In late December, chart swings low around 97.40 where if a break from this level would undermine the current recovery. The 96.00 area would be the major psychological and historical support dating back to mid-September 2025.

USDX 2-Hour Chart Analysis

On the H2 timeframe, price action remains constructive, with a sequence of strong bullish candles. That said, the most recent candle shows a small real body and a long upper wick, suggesting early selling pressure as the index approaches the 98.30 resistance.

The higher-possibility near-term outcome is a phase of sideways consolidation or a shallow pullback toward 98.55, before another higher attempt.

Scenario Breakdown

Bullish Continuation

A strong H2 close above 98.710 would open the path toward 99.00, supported by a Stochastic reading holding above 80 and a firmly rising purple moving average.

Mean-Reversion Pullback

Failure to break 98.710, followed by a drop below 98.545, would likely trigger a retracement toward 98.20. This would be viewed as a corrective move rather than a trend reversal, potentially offering a "buy-the-dip" opportunity.

USDX Pivot & Intraday Structure (M30)

On the 30-minute chart, the USDX continues to favour a buy-the-drip structure, despite mild signs of short-term exhaustion. The broader intraday trend remains upward.

The key level to watch is 98.64. Holding above this area keeps bullish momentum intact, while a break below could open the door to a deeper retracement toward 98.50.

Intraday Scenarios

Bullish Continuation

A clean break and close above 98.715 would target 98.80, followed by 99.00 Stochastic remaining above 80 would reinforce trend strength rather than signal exhaustion.

Mean Reversion

An M30 close below 98.640 could trigger a pullback toward the black moving average at 98.500. Many intraday traders would interpret this as a healthy correction within an uptrend, rather than a bearish reversal.

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