The US Dollar remained under pressure on Thursday, November 5, with the US Dollar Index (DXY) falling to a monthly low near 101.20 before trading around 101.44. The decline follows the Democratic Party’s sweeping victory in the US midterm elections, raising concerns over political gridlock in Washington. Meanwhile, optimism surrounding a potential resolution to the Middle East conflict has pushed oil prices lower, adding pressure on the Greenback.
However, resilient US economic data could limit further losses. October’s ADP employment report showed private-sector hiring increased by 86,000, beating expectations of 69,000. The ISM Services PMI eased to 54.5 from 54.9 but remained above the 50-point expansion threshold.
Markets are also pricing in an approximately 82% probability of another Federal Reserve rate hike in December. Investors are now awaiting US Initial Jobless Claims and Friday’s Nonfarm Payrolls (NFP) report for further clues about the Fed’s policy outlook.
Technical Analysis
DXY trades around 101.443 on the daily chart, approaching the 0.382 Fibonacci retracement at 101.269 after retreating from its October high near 102.945. Momentum indicators favor sellers. The RSI stands at 46.15, below the neutral 50 level, while the MACD remains below its signal line, with a negative histogram of -0.126.
Immediate support lies at 101.269. A confirmed break below this level could expose 100.751, followed by the 100.233–100.058 support zone. On the upside, resistance stands at 101.909. A sustained break above this level could signal a recovery toward 102.945. Until then, the technical bias remains bearish, although a rebound from current support cannot be ruled out.
DXY’s direction could influence major currency pairs and gold as markets balance political uncertainty against expectations of tighter US monetary policy. Further Dollar weakness could support EUR/USD, GBP/USD, and gold, while stronger employment figures may trigger a recovery in the Greenback. USD/JPY could also react to changing US rate expectations alongside Japanese monetary policy developments.
Traders should watch the 101.269 support and 101.909 resistance levels, as well as the upcoming NFP release. These catalysts could determine whether the Dollar extends its decline or stages a short-term rebound. Monitoring both fundamental developments and technical confirmation is essential for managing volatility and trade risk.
