DXY outlook: The dollar drops after the US Government reopens

[Ben Graham]

The US dollar always moves in complex ways, influenced by a large multitude of factors.

Some are straightforward, like a demand for the USD when the US economy performs better than its peers or when investors seek exposure to US assets and Stocks.

Some dollar dynamics are more obscure, like the link between dollar strength and expected change in paths for the Fed (sometimes, even a rate cut can boost the dollar – assuming communication is not dovish) or the even more confusing banking demand for dollar funding (cross-currency basis swaps, repo dynamics, etc ...)

All of this goes into fundamental analysis for the Greenback – but how weird was its rise in the middle of the longest ever US government shutdown (that just ended)?

Some might say that the shutdown did not significantly influence markets – and they might be right.

Odds for a December cut have been steadily decreasing since Powell's recent speech at the FOMC rate decision conference, from 98% priced in just a week before the event to the current 54%.

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Pricing of the next Fed rate cut, November 13, 2025 – Source: CMEGroup

This change of interest rate pricing could have been the reason behind the rise from 97.90 to a peak of 100.37 in the Dollar Index throughout the Government Shutdown period, but this still seems contradictory.

In any case, for traders, pictures are worth a thousand words – Let's dive right into our multi-timeframe US Dollar Index (DXY) analysis.

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DXY multi-timeframe analysis

DXY Daily Chart

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Dollar Index (DXY) Daily Chart, November 13, 2025 – Source: TradingView

The past month's rise, forming an upward channel, was surprisingly tenace despite the fundamentals.

But moving averages, especially Daily, can act as strong resistances – Look at how prices reacted to the 200-Day MA (currently at 100.125), which just caught up to this year's fall in the DXY.

In yesterday's trading, a test of the lower bound of the upward channel failed, leading to this morning's break lower.

As traders still await for public BLS data, momentum corrects back to neutral – Expect a lot of volatility as economic data makes a comeback.

Its downward tilt hints at a more bearish/mean-reverting price action but a close below the channel would be required for confirmation.

4H Chart and technical levels

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Dollar Index (DXY) 4H Chart, November 13, 2025 – Source: TradingView

Levels to place on your DXY charts:

Resistance Levels

• 99.60 to 99.80 mini-resistance
• 100.00 to 100.50 Main resistance zone
• 100.376 November highs
• Top of channel round 100.650
• Weekly highs & 4H 50-period MA 99.74

Support Levels

• Higher timeframe Pivot 98.80 to 99.00 (immediate test)
• Mini-support 98.50
• Main support 98.00
• Session lows 99.152

1H Chart

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Dollar Index (DXY) 1H Chart, November 13, 2025 – Source: TradingView

Some small mean-reversion buying is taking place on the shorter timeframe, but below the steep trendline, bears are in control as prices trend in an hourly bear-channel.

Two scenarios can unfold from here:

• A reversal from the channel lows breaks the trendline which hints at a pullback between 99.40 to 99.50 (retest of October channel bound)
• Sellers break the daily lows and test the 98.80 to 99.00 pivot zone

As breakout scenarios don't seem to be materializing for now, the price action looks balanced, but still expect some volatility with this afternoon's Fed speeches: Musalem (2025 voter) and Hammack (2026 voter) go back to back at 13:15.

Fed's Kashkari (2026 voter) will also appear in a few minutes.

And don't forget the 30-year bond auction at 13:00 which can affect the USD and have been getting some traction as of late.

Safe Trades!

Follow Elior on Twitter/X for Additional Market News, interactions and Insights @EliorManier

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