Technically, the dollar index remains in a corrective phase. The short-term trend remains up after the index broke above the 50-day moving average at 98.391 in early October. However, the longer-term trend remains down, as the rally stalled at the 200-day moving average, tested at 100.360 on November 5. This level has proven to be a cap for bullish momentum.
With the index pulling back since that rejection, today’s intraday test of 99.463 marked the first key downside target in this correction. Traders now see the index locked between well-defined moving averages, awaiting a stronger catalyst to break the range that’s held since August.
China Export Drop Adds to Global Demand Concerns
Weakness in China’s October trade data added another layer of caution. Exports posted their steepest drop since February, raising questions about global demand and Beijing’s ability to diversify away from U.S. markets. That uncertainty has spilled into European outlooks, with the euro gaining 0.35% to $1.15868 on stable rate expectations, even as broader global growth questions remain unresolved.
Safe-Haven Flows Show Mixed Preferences
While the dollar retained some safe-haven appeal, the Japanese yen has reasserted itself as the market’s preferred defensive currency. The dollar rose modestly to 153.27 yen, rebounding from earlier lows, but expectations that the Bank of Japan will hold rates at 0.5% until at least May 2026 limit the upside in USD/JPY. Broader safe-haven flows have also increased, with tech-heavy equity markets heading for their worst weekly performance in seven months.
