After suffering its biggest weekly decline since July last week, the dollar kicked off the new week by maintaining its downward trajectory.

On Monday (November 20), the US dollar index fell to its lowest level in the past 2 months, as low as 103.36, while sending bearish signals based on recent economic developments.

Following last week's lower-than-expected inflation data, investors' belief that the Fed is done raising interest rates has solidified. As a result, the market turned its attention to when the Fed might start cutting interest rates.

Despite recent dovish comments from Fed officials in support of a weaker dollar, market pricing has not fully factored in officials' statements, suggesting that tightening could resume if needed.

With the view that the Fed will transition to the pivot phase of interest rates gaining traction, there are still some signs that the Fed could start cutting rates sooner, impacting risk appetite.

Meanwhile, the minutes of the last Federal Reserve meeting are expected to be released tomorrow, which will leave interest rates unchanged for a second time.

Based on last week's action, the minutes' impact on the dollar is expected to be limited.

Despite the escalating geopolitical issues, the US dollar index performed steadily in October, but has now entered a downtrend due to increased risk appetite due to widening regional tensions and slowing news flows.

From a technical point of view, the dollar maintained a one-month sideways trend during September and October, and then entered a correction trend.

The index tried to hold 105 support for a while, but lost support in the 104.2 zone after last week's sharp decline and is moving towards the main support zone of 102.5-103, while maintaining a negative outlook for the week.

The region may be tested this week. If there is a breakout, the index could fall to 101, the support level of the first half of the year.

On the other hand, the short-term moving average continues to indicate that the decline may continue due to being in an inverted crossover phase.

On a weekly basis, the stochastic Relative Strength Indicator (RSI) suggests more room to fall. In the short term, the indicator has started to reflect oversold conditions. For a possible reversal, it becomes important to maintain intermediate support at 103.4.

Yet there is little data to suggest that demand for the dollar is surging. As oil prices retreated this week, the Opec meeting decided to cut oil supply, which could lead to short-term reactive buying of the dollar.

From the current situation, the index is more likely to continue the adjustment phase.

Eur/USD rallied to the 1.09 zone in the process. Usd/JPY pulled back sharply on the weakness of the dollar and started the week with sellers selling down to the 147 range. Gold turned upward last week and started the week in a horizontal direction. This week, the resistance level 1.093 corresponds to the potential support level (Fib 0.618) becomes very important, and if this resistance level is broken, the pair may hit the next resistance level 1.1 corresponds to the potential support level (Fib 0.786). Otherwise, we can see that the euro could fall to $1.083.