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21.08.202612:41 Forex Analysis & Reviews: DXY: analysis and forecast. Geopolitical risks limit further losses in DXY

Exchange Rates 21.08.2026 analysis

Today, on Friday, the US Dollar Index (DXY), which tracks the US dollar against a basket of currencies, is attracting fresh selling interest.

Traders have scaled back their expectations for an imminent Federal Reserve's rate hike following the release of weak US inflation data last week, which is viewed as a negative factor for the US dollar. At the same time, the market's initial reaction to the US Treasury's announcement of increased volumes for certain buyback operations involving longer-term debt securities quickly faded amid inflation risks associated with rising energy prices.

Exchange Rates 21.08.2026 analysis

Indeed, oil prices reached a new three-week high on Thursday after President Donald Trump announced the launch of what he described as the most devastating economic operation against Iran.

He also threatened tough sanctions against any country that helps Iran circumvent sanctions or does business with Tehran. This creates a geopolitical risk premium that could discourage traders from taking aggressive bearish positions against the US dollar.

In addition, CME Group's FedWatch Tool shows that investors still assess the probability of the US central bank raising interest rates at least once by the end of the current year at approximately 68%. This provides a supportive backdrop for higher US Treasury yields and should help limit further losses in the DXY. Therefore, it may be prudent to wait for further selling before taking a position on additional US dollar depreciation.

From a technical perspective, the Dollar Index continues to lose ground, trading at levels last seen in mid-May. The oscillators are in negative territory, confirming the bears' advantage in the market. However, it is worth noting that the Relative Strength Index (RSI) is approaching oversold territory, warning of a potential consolidation.

Support is provided by the 98.50 level, below which the index could accelerate its decline toward the psychological 98.00 level. Resistance is seen at 98.90 and 99.00, with the 200-day SMA located above these levels. A break above the 200-day SMA would give the bulls a chance to extend the recovery.

The table below shows the percentage change in the US dollar against major currencies for the current week. The US dollar has shown the greatest strength against the Japanese yen.

Exchange Rates 21.08.2026 analysis

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

Irina Yanina,
Analytical expert of InstaSpot
© 2007-2026
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