# Dollar Index Breaks 99.38 as EUR/USD and GBP/USD Continue Rally DXY decline boosts Euro and Sterling against the greenback. - **Source:** [Yahoo Finance](https://brifing.si/source/7f1dcdb9-78c9-4a6d-ac05-c0d4d417b569) - **Published:** 2026-08-21 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/e980f5f2-de36-4c9d-81b3-e2bb52a9f104 ## DXY Breaks Key Support The US Dollar Index (DXY) broke below the 99.38 support level, hitting a 3-week low. This move was triggered by expectations of loose Fed policy and improved risk appetite. The index currently trades at 99.15. Analysts warn the 99.00 psychological level could be tested next. Technical indicators show bearish momentum building. ## Euro Gains Ground EUR/USD broke above 1.1850 resistance, reaching 1.1880. ECB's revised inflation targets supported the Euro. RSI above 60 indicates bullish momentum. The 1.1900 level presents the next key resistance. Upcoming Eurozone PMI data will be crucial for direction. Traders watch for potential overbought conditions near current levels. ## Sterling Strengthens GBP/USD tested 1.3950, approaching 6-week highs. UK reopening plans and positive economic data boost the Pound. The 1.4000 psychological level remains a key target. BOE rate decisions and post-Brexit trade negotiations will influence future moves. Technical indicators suggest room for further upside. ## Fed Policy Impact Chair Powell's comments about transitory inflation weakened the Dollar. Markets don't expect rate hikes until 2022 at earliest. 10-year Treasury yields hover around 1.30%. Dollar weakness supports commodity prices and EM currencies. The Fed's patience continues to weigh on USD sentiment. ## Technical Outlook DXY trades below its 200-day moving average on daily charts. MACD shows bearish momentum. Next support levels at 98.80-99.00 band. RSI for EUR/USD and GBP/USD approaches overbought territory. Short-term corrections possible after recent rallies. Traders watch for potential trend reversals at key levels. ## Commodity Currencies USD weakness pushed AUD/USD toward 0.7600 and USD/CAD toward 1.2400. Rising oil prices support the Canadian Dollar. AUD benefits from positive China data. Commodity price gains provide tailwinds for these currencies. Correlation with risk sentiment remains strong for commodity FX. ## Risk Appetite Dynamics Global equity markets at record highs boost risk appetite. VIX fear index fell to 18. Investors move away from safe havens like USD. Demand for EM assets increases in this environment. The reflation trade continues to pressure the Dollar across FX markets. ## Key Events Ahead Upcoming US inflation data and Fed speeches will drive markets. Eurozone and UK PMI releases due. Testing of technical levels may increase volatility. Traders assess whether Dollar's downtrend will continue. Positioning for next week's economic calendar remains cautious. ## Sources covering this story - https://finance.yahoo.com/markets/currencies/articles/us-dollar-price-forecast-dxy-061736696.html — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._