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The US dollar index (DXY) closed at 98.98, with an intraday high of 99.43 and a low of 98.81. The index has extended its recovery, breaking decisively above the 98.50 resistance area and posting its strongest daily close in weeks. This move reinforces the near-term bullish structure and signals a potential continuation toward the 100.00 psychological level.
Key Technical Observations
Moving Averages Turn Bullish: The 15-day moving average (98.15) has crossed above the 20-day moving average (97.90) for the first time in several weeks, confirming a short-term bullish crossover. The slope of both averages has turned positive, suggesting improving momentum.
Trend Structure: The index has transitioned from a prolonged downtrend into a base formation and now shows early signs of an upside breakout. The breakout above 98.50 marks the first meaningful higher high since late last year, strengthening the bullish case.
RSI Momentum: The RSI reads 59.53, firmly above the neutral 50 level but still below overbought conditions. This indicates bullish momentum with room for further upside before any exhaustion.
Volume Confirmation: Despite muted volume, price follow-through above 98.50 suggests strong conviction from US dollar buyers, particularly as global peers like the euro and pound weaken.
Macro & Market Context
Fed Policy Influence: Expectations that the Federal Reserve will remain cautious about rate cuts have bolstered the US dollar’s appeal, especially relative to dovish central banks such as the ECB and BoJ.
Risk Aversion Tailwind: Geopolitical and inflationary concerns continue to drive safe-haven demand for the US dollar, further supporting the index.
Yield Support: Stable or rising U.S. Treasury yields are providing a favourable backdrop for US dollar strength, while weaker global bond yields widen rate differentials in favour of USD.
Key Levels to Watch
- Immediate Resistance: 99.50 – short-term high and psychological level.
- Next Resistance: 100.00 – major round-number resistance, followed by 101.50.
- Immediate Support: 98.50 – prior breakout zone now turned support.
- Deeper Support: 97.60 – base of recent consolidation.
Bias: Bullish
Momentum has turned decisively in favour of the US dollar. The next leg higher could target 99.50–100.00, provided the index holds above 98.50 on a daily closing basis. Only a sustained move back below 97.60 would negate this bullish setup.
The bias favours buy-on-dip opportunities toward 98.50–98.70, targeting 99.50–100.00 with stops below 97.60. RSI still offers headroom for continuation, suggesting dips may be shallow and well-supported.