US Dollar Index Analysis: Dollar Breakout or Fake Out?

In this comprehensive analysis, Ultima Markets brings you an insightful breakdown of the USDX for August 12, 2025.

Technical Analysis of USDXUSDX Daily Chart Insights

• Stochastic Oscillator: The indicator remains neutral in the mid-range, suggesting a potential consolidation phase before the next significant price movement.

• Key support area: The immediate support at ~98.80 is currently being tested and is crucial for maintaining the bullish outlook. Minor support sits at ~97.00 from the mid-July swing low. Major support at ~96.50 marks the multi-month low from late June/early July, where a break below would invalidate the recovery and signal a return to the primary downtrend.

USDX 2-hour Chart Analysis

• Bullish bias: The oscillator shows an upward trend within the upper half of its range, reflecting robust bullish momentum. Since it hasnt reached extreme overbought levels, additional upside potential may remain for further price advancement.

• Breakout scenarios: The current and most likely scenario involves a bullish breakout continuation, where the path of least resistance remains upward as long as the price holds above the 98.20 – 98.30 support zone, with a break above 98.80 clearing the way for a test of 99.10 and ultimately the major resistance at 100.00. Alternatively, a bearish reversal or “false breakout” would occur if the price fails to sustain its upward momentum and drops below the 98.20 support level, signaling a “bull trap” where sellers have regained control and putting the previous range low of 97.80 back in focus as the next target.

USDX Pivot Indicator

• The moving averages have formed a bullish configuration with the faster MAs positioned above the slower ones, while the key averages are beginning to slope upwards, indicating building bullish momentum. The Stochastic oscillator is positioned in the lower portion of its range and heading towards oversold territory, suggesting that current selling pressure may be nearing exhaustion and potentially setting the stage for a bounce or resumption of the uptrend.

• Bullish Breakout Continuation: The price finds firm support within the 98.17-98.22 zone. The Stochastic oscillator bottoms out and turns upwards. Buyers step back in, pushing the price back above 98.40 and eventually challenging the major resistance at 98.52. A sustained break above 98.52 confirms the uptrend is resuming.

• Bearish Breakdown: The price fails to hold the 98.17 support level and breaks down decisively. This would indicate that the recent rally has failed and sellers are back in control. The first target would be the 97.97 support level. A breach of this level would signal a significant bearish reversal on this time-frame.

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