USDX Faces Renewed Selling Pressure After Rejection at Key Resistance

Ultima Markets Daily Market Insights – January 21, 2026

USDX Daily Chart Overview

The latest session produced a decisive bearish engulfing candle, fully erasing gains from the prior two days. This price action signals a clear rejection at higher levels and confirms that selling pressure has re-emerged.

The 98.85 - 99.00 zone remains the immediate resistance area, aligning with the intermediate-term moving average where price was recently rejected. Momentum indicators are starting to roll over, reinforcing the bearish bias in the near term.

On the downside, 97.80 is the first level to monitor. This area previously acted as a consolidation zone and now represents initial support. With the rejection at resistance and momentum turning lower, risks are skewed toward further downside unless price can reclaim key moving averages.

Key Levels

Resistance

The 98.85 - 99.00 zone marks immediate resistance and has already proven difficult to overcome, coinciding with the intermediate-term moving average. Above this, 99.70 - 99.80 represents major resistance where the long-term moving average resides. A sustained break above this region would be required to neutralise the bearish outlook. The cycle high at 100.29, set in November, remains the broader upside ceiling.

Support

Initial support is located near 97.80, a minor psychological level and former consolidation area. A move below this would expose 97.20, where a break would confirm a lower-low structure. Major support sits between 95.90 and 96.20, marking the September lows and serving as the key structural floor for the current trend.

USDX 2-Hour Chart Analysis

On the H2 timeframe, sellers remain firmly in control. The preferred tactical approach is to fade rallies into resistance, particularly near the 98.45 - 98.55 zone, with downside targets at 98.10 and 97.80.

A bearish continuation scenario is favoured if price fails to hold above 98.55 and breaks below 98.08, confirming further downside momentum. There is also risk of a bull trap if price briefly pushes above the green moving average but quickly reverses, potentially accelerating selling pressure.

For the bearish bias to ease, USDX would need to reclaim and close above 98.80, which could shift the market into a neutral consolidation phase.

USDX Pivot Indicator

The intraday structure continues to favour sellers. With a bearish Stochastic crossover and price capped below the short-term moving average, the probability of a downside resolution remains elevated.

Bearish Continuation

A decisive close below 98.20 would confirm the consolidation as a pause within the downtrend, opening the door for a move toward 97.80.

Bullish Correction

A break above 98.40 may trigger a brief squeeze toward 98.55, though any upside is likely corrective unless the index can reclaim the long-term moving average.

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