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The US Dollar Index (DX) closed at 98.70, with an intraday high of 98.75 and a low of 98.56. The index continues to consolidate near recent highs after breaking above the 98.50 threshold last week. The price action suggests a stabilizing bullish tone, supported by firm Treasury yields and cautious risk sentiment globally.
Key Technical Observations
Moving Averages Turn Positive: The 15-day moving average (98.63) is now above the 20-day moving average (98.35), confirming a short-term bullish crossover. The positive slope of both averages reflects renewed upside momentum and a possible continuation of the broader rebound from the 97.00 base.
Trend Structure: After several months of choppy range-bound trading, the index has now formed a higher low and is attempting to establish a bullish structure above 98.50. Sustained daily closes above this level will strengthen the argument for a near-term trend reversal targeting the 99.50–100.00 resistance zone.
RSI Momentum: The RSI at 56.64 indicates a healthy bullish bias without approaching overbought territory. This leaves room for further gains, particularly if momentum continues to align with the recent moving-average crossover.
Price Behaviour: The daily candles show narrowing volatility — a consolidation phase often preceding continuation moves. The fact that pullbacks toward 98.30 have been shallow reflects underlying buying interest.
Macro & Market Context
Federal Reserve Policy Outlook: Expectations for a “higher-for-longer” rate environment continue to support the dollar. Recent U.S. economic data — especially resilient employment and inflation readings — have tempered rate-cut expectations for 2025.
Global Rate Divergence: While the Fed holds firm, central banks such as the ECB and BoJ remain dovish, widening rate differentials in favour of the dollar.
Risk Appetite: Lingering geopolitical tensions and slowing global growth maintain mild risk aversion, favouring the dollar’s safe-haven appeal.
Key Levels to Watch
- Immediate Resistance: 98.80 – recent high; key breakout confirmation level.
- Next Resistance: 99.50 and 100.00 – psychological round-number zone.
- Immediate Support: 98.30 – near-term base aligned with 20-day moving average.
- Deeper Support: 97.70 – last higher low before trend reversal risk.
Bias: Bullish
Momentum remains in favour of the bulls while above 98.30. A daily close above 98.80 could extend gains toward 99.50–100.00, while failure to hold 98.30 would signal a short-term pause in the uptrend.
Traders can look for buy-on-dip setups above 98.30, targeting 99.50–100.00, with stops below 97.70. RSI confirms that the rally is sustainable without signs of exhaustion, making dips likely to attract renewed buying interest.