Core Viewpoint - The US dollar index has shown a significant decline after a brief rebound, primarily driven by weaker-than-expected inflation data and underlying concerns about the US macroeconomic framework [3][4]. Fundamental Analysis - The US core CPI increased by only 0.2% month-on-month, providing an opportunity for dollar bears to re-enter the market [3]. - There are growing doubts among traders regarding the resilience of the US economy, with expectations of a 50 basis point rate cut by the end of the year remaining unchanged despite the inflation data [3]. - The 10-year swap spread for the dollar remains elevated, exceeding 50 basis points, indicating market concerns about US Treasury market pressures and fiscal sustainability [3]. Technical Analysis - The dollar index is in a clear downtrend, currently trading around 100.90, with a significant drop from the 110 level [5]. - The MACD indicator has been below the zero line for an extended period, suggesting a weak overall trend despite recent bullish signals [5]. - The Bollinger Bands indicate a wide trading range, with the upper band at 101.92 and the lower band at 98.02, while the price is constrained by the 99.97 midline [5]. Market Sentiment Observation - Market sentiment is characterized by skepticism, with traders increasingly losing confidence in the dollar [7]. - The short-lived rebound in the dollar reflects a cautious attitude among traders, who are quick to capitalize on any upward movement to short the currency [7]. - Overall sentiment remains pessimistic but has not reached extreme panic levels, with short positions on the dollar being the predominant strategy [7]. Market Outlook - In the short term, the dollar index is expected to oscillate within the 100.14 - 101.80 range, with potential support if US economic data exceeds expectations [8]. - A successful breakout above the 101.17 resistance level could lead to a rally towards 102.22 [8]. - Long-term structural pressures on the dollar are significant, with the trend of de-dollarization potentially impacting reserve composition and cross-border settlements [8].