US Dollar Index Price Forecast: Falls to a fresh three-week low near 101.45

• Lower US bond yields weigh on the US Dollar Index, sending it to a new three-week low near 101.45.
• Softer housing market conditions put downward pressure on US Treasury yields.
• After strong Q3 results, Meta modestly increases its AI spending guidance.

Softer housing market conditions in the United States (US) are pushing bond yields lower, leaving the US Dollar (USD) trailing its major peers.

With 10-year US Treasury yields down 0.7% at around 5.07%, the US Dollar Index (DXY) reaches a new three-week low near 101.45 during Thursday’s European session. The index measures the Greenback’s value against six major currencies.

Weaker US housing figures support demand for duration

September’s housing figures helped drive the earlier fall in yields, according to Deutsche Bank analysts, who describe the move as "supported by soft housing data for September," citing a decline in housing starts of "‑5.2% vs +1.9% exp." They also point to "a sharp slowing in pending home sales," with "their annual growth" dropping "to its lowest since 2023 at ‑12.6% yoy." In their view, this deterioration in housing conditions has bolstered modest demand for duration at the long end of the US yield curve.

At the same time, concerns surrounding Artificial Intelligence (AI) growth appear to be fading, with Meta reaffirming substantial plans to spend on AI infrastructure.

Deutsche Bank analysts report that Meta shares gained more than “+2% in after-hours trading,” following better-than-expected Q3 revenue of “$64.6bn vs $63.3bn est.” The company also provided Q4 guidance “towards the upper end of expectations” at “$73-76bn vs $73.6bn est.” Highlighting Meta’s ongoing commitment to AI investment, Deutsche Bank adds that the company “slightly boosted its 2026 capex plan from a $130bn-145bn range to $135bn-145bn,” reinforcing its focus on AI-related expenditure.

US Dollar Index Holds a Neutral Near-Term Technical Bias

At 101.52 on the daily chart, Dollar Index Spot remains below its 20-day Exponential Moving Average (EMA) of 101.65 but above the 38.2% Fibonacci retracement at 101.26. This positioning points to a neutral near-term outlook and consolidation following the recent rise. With the Relative Strength Index (14) near 51, directional conviction appears to have weakened, leaving neither buyers nor sellers clearly in control.

The 20-day EMA at 101.65 provides the first resistance level, ahead of the 23.6% Fibonacci retracement at 101.89. A sustained move through both would clear a path towards the recent swing high near the 0.0% retracement at 102.91. Below the market, the 38.2% retracement at 101.26 offers initial support, followed by 100.75 and 100.24, corresponding to the 50.0% and 61.8% retracements. A more pronounced decline would bring the 78.6% level at 99.52 into view, followed by the base of the current Fibonacci range near 98.60.

(The technical analysis of this story was written with the help of an AI tool. Know more.)