Market Analysis Summary: Dollar Strength and EUR/USD Pressure
Published: January 9, 2026
The U.S. dollar has shown continued strength, gaining momentum and shifting the short-term market dynamics in its favor. The EUR/USD pair has recently broken below a significant technical support level, indicating a potential shift in control between buyers and sellers.
U.S. Dollar Analysis
The dollar index (DX.F) has successfully breached its first resistance zone, paving the way towards a higher resistance area characterized by the upper boundary of a rising channel and key Fibonacci retracement levels. Despite the bullish attempts to push through this resistance, sellers have consistently intervened, particularly around the 99.00 mark, capping the price movement.
Current momentum indicators are in overbought territory, suggesting an increased risk of sell signals emerging soon. If sellers regain control and manage to close below the upper channel line, the first downside target would likely be around 98.53, with further potential to drop to 98.26 and possibly lower.
EUR/USD Dynamics
In the context of the EUR/USD pair, recent analysis indicated a bearish divergence and sell signals, suggesting that while momentum remains, the risk of a downturn is rising. The pair has closed below the consolidation zone, triggering further selling pressure and driving the price down to the 50% Fibonacci retracement level, which aligns with early December lows.
Momentum indicators for EUR/USD have now entered oversold territory, which, combined with the dollar's resistance, creates a scenario where a short-term reversal or bounce could occur. Should bulls re-enter the market, the first target for recovery would be the previously broken upper line of the rising channel, currently around 1.1732.
Strategic Takeaway
For traders, the current environment suggests a cautious approach. The dollar's strength is evident, but it is approaching a heavy resistance zone, making it risky to pursue long positions without confirmation of a breakout. Conversely, while bears maintain control over EUR/USD, the oversold conditions and resistance faced by the dollar indicate that a pause or bounce may be imminent.
The recommended action is to wait for confirmation from the market before making any commitments, particularly observing reactions around the resistance for the dollar and support for the EUR/USD pair. This strategic patience will help set the tone for trading in the upcoming sessions.