US Dollar: Bullish Momentum Accelerates Toward Key Resistance

The US Dollar Index (DXY) closed at 99.76, after reaching an intraday high of 99.84 and a low of 99.76. The index continues its upward trajectory, supported by sustained dollar demand and improving technical momentum. The breakout above 99.50 marks a continuation of the recovery phase, with the next major resistance level now in focus near the 100.00 psychological zone.

Key Technical Observations

Moving Averages Support Bullish Continuation: The 15-day moving average (98.97) has crossed above the 20-day moving average (98.99) — forming a bullish crossover that confirms upward momentum. Both moving averages are sloping higher, reflecting strengthening trend alignment.

Trend Structure: DXY has formed a sequence of higher highs and higher lows since bottoming around 96.50 earlier in the year. The sustained move above 99.50 — a key horizontal barrier — now validates a trend continuation setup toward 100.50.

RSI Momentum: The RSI (14) sits at 64.85, signalling strong bullish momentum but not yet overbought. This suggests the rally still has room to extend before facing potential exhaustion pressures near 70.

Price Behaviour: Recent bullish candles are showing healthy body size and minimal upper wicks, confirming steady buyer conviction. A daily close above 99.80 would solidify the breakout structure and expose the 100.50–101.00 resistance area.

Macro & Market Context

Fed’s Hawkish Tone Supports USD: Markets continue to price in fewer rate cuts for 2025 amid persistent inflation data and robust employment indicators. The resulting yield differential favours the dollar, especially against low-yielding peers.

Global Risk Sentiment: Lingering geopolitical uncertainty and mixed global growth data are fuelling safe-haven demand for the USD, complementing the technical breakout.

Comparative Weakness Abroad: The euro and pound remain pressured by softer growth expectations and dovish ECB/BoE outlooks, amplifying relative USD strength.

Key Levels to Watch

• Immediate Resistance: 100.00 – psychological level; minor breakout test.
• Next Resistance: 101.50 – key structural ceiling from last quarter.
• Immediate Support: 99.00 – breakout zone; expected to hold on pullbacks.
• Deeper Support: 98.30 – short-term base aligned with the rising 20-day moving average.

Bias: Bullish

The bullish trend remains intact while the index holds above 99.00. A decisive close above 99.80 paves the way for 100.50–101.00, with further upside possible if macro data supports yield expansion. Only a sustained reversal below 98.30 would challenge the bullish structure.

Key Takeaways

• Bias favours buying dips toward 99.00–99.30, targeting 100.50–101.00.
• RSI shows room for continuation, but traders should watch for signs of exhaustion near 100.50.
• USD strength likely to remain dominant across major FX pairs as long as Fed policy remains restrictive.