USD faces triple threat: Technical breakdown and dovish Fed shift ahead

The US dollar index is poised for continued weakness this week, facing pressure from three converging factors that suggest further downside ahead. First, disappointing employment data has shifted Fed rate expectations dramatically, with markets now pricing in two rate cuts by year-end versus previous hawkish positioning. Second, technical indicators show the dollar index breaking below key support at 103.50, with momentum oscillators turning bearish and the 50-day moving average at 104.20 now acting as resistance. Third, positioning data reveals excessive long dollar positions among speculative traders, setting up potential for a squeeze lower. EUR/USD has broken above 1.0900 resistance and targets 1.1000, while GBP/USD eyes 1.3200 after clearing 1.3150. USD/JPY shows vulnerability below 147.50 support. Traders should watch upcoming US CPI data and Fed speakers for confirmation of the dovish pivot, which could accelerate dollar selling pressure.