FX Weekly Overview (Brazil Issue)
Dollar expected to reflect Brazil's electoral race, US CPI, and IPCA
Leonel Mattos
- Currencies
U.S. Dollar Technical Levels Frame Next Move
By: Michael Boutros, Sr. Technical Strategist
The U.S. Dollar Index is trading within a tightening range in February 2026, with price compressing between clearly defined technical levels. After a nearly 4 percent drop from the January high, followed by a 2.5 percent rebound and a renewed 1.5 percent pullback, the structure reflects contraction rather than trend expansion. Support near 96.48 and resistance near 97.88 now anchor the broader framework guiding positioning. With inflation and growth data looming, this technical compression leaves the US Dollar Index vulnerable to a decisive breakout or breakdown.
Michael Boutros, Senior Market Analyst, has spent years mapping multi-timeframe currency structures across major macro inflection points. His work integrates weekly, daily and intraday technical frameworks to identify where institutional flows are likely to react. That cross-timeframe approach is central to understanding how the current U.S. Dollar Index setup could resolve as event risk builds.
Key Themes
- The U.S. Dollar Index is locked between 96.48 support and 97.88 resistance within a contractionary range since January.
- Daily momentum remains below 50, offering no directional bias while price sits near the February monthly open.
- A break below 96.48 exposes downside toward 95 and 95.60, while clearance above 97.88 targets 98.55 to 98.68.
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Discover Actionable Insights with the latest Market Outlook ReportsUS Dollar Weekly Structure Defines Major Break Levels
The U.S. Dollar Index weekly chart is defining the outer boundaries of the current contraction, with 96.48 marking pivotal support and 98.24 to 98.55 framing resistance. Boutros underscores the importance of this compression, noting "we are seeing contractionary range since the start of the year", which reflects a market waiting for a catalyst. A sustained break below 96.48 would expose the 95 zone, which he calls "the big Whopper zone", referencing confluence from retracements and prior cycle pivots. Consequently, a failure at support would signal resumption of the broader downtrend, while a clearance above resistance would argue for a more durable structural low in the U.S. Dollar Index.
U.S. Dollar Daily and Four Hour Charts Signal Inflection
The U.S. Dollar Index daily momentum profile is offering limited directional guidance, with relative strength trading just below 50 and price hovering near the February monthly open. Boutros acknowledges that "momentum isn't really helping", reinforcing the importance of price-based levels over oscillator signals. On the four-hour structure, median line parallels highlight near-term support at 96.89 into 96.87, levels that must hold if upside pressure is to build. As a result, the interaction between intraday structure and weekly range highs near 97.88 could determine whether the U.S. Dollar Index transitions from compression into expansion in the sessions ahead.
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--- Written by Lindo Xulu, StoneX TV Journalist
--- Expert: Michael Boutros, Senior Market Analyst
- Currencies
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