USD Index shows September pattern but rally momentum weakens

The US Dollar Index (DXY) is displaying price action reminiscent of September's pattern, currently trading near 104.20 but with notably reduced bullish momentum. Unlike September's sharp rally, current market dynamics suggest a more subdued dollar performance ahead. EUR/USD remains range-bound near 1.0800, while USD/CAD faces resistance at 1.3900 amid Canadian fiscal stimulus expectations. The divergence from September's aggressive dollar strength reflects shifting market sentiment and reduced expectations for hawkish Fed surprises. Technical indicators show DXY struggling to break above 104.50 resistance, with support at 103.80. A failure to maintain above 104.00 could signal further dollar weakness across major pairs. Market participants are increasingly focused on upcoming economic data releases, particularly US employment figures and inflation metrics, which could determine whether the dollar can regain its earlier momentum or continue its current consolidation phase.