The U.S. Dollar Index (DXY) is struggling to capitalize on the modest gains from the previous day, attracting new sellers today. At the moment, the index is trading near 103.60, down over 0.20% from the day's opening and hovering close to November lows reached last week.

Investors remain concerned about U.S. President Donald Trump's trade tariffs and their potential impact on the U.S. economy. Moreover, Friday's weak Non-Farm Payrolls (NFP) report confirmed signs of a cooling labor market, further fueling speculation about multiple rate cuts by the Federal Reserve this year. This keeps U.S. Treasury yields at low levels, which typically weighs on the dollar's performance.

Additionally, the recent strength in other major currencies, such as the euro, which has been boosted by a historic deal to ease borrowing limits in Germany, and the Japanese yen, which is supported by expectations of a rate hike by the Bank of Japan, is adding pressure on the dollar. However, general risk aversion could still provide some support for the safe-haven greenback. Traders may prefer to hold off on opening new positions ahead of the upcoming U.S. inflation data.

The key event will be Wednesday's U.S. Consumer Price Index (CPI) report, followed by the Producer Price Index (PPI) release on Thursday. These figures could significantly shape market expectations regarding the Fed's future policy direction, thereby influencing the short-term price action of the dollar. Meanwhile, traders should also monitor the JOLTS Job Openings report later today during the North American session, as it could provide short-term trading impulses.

From a technical perspective, the Relative Strength Index (RSI) is in oversold territory, suggesting that sellers should proceed with caution. However, the MACD indicator still signals a potential for further downward movement.