The US Dollar Index (DXY) is testing a key support zone near 98.55–98.70, and the technical setup suggests a possible double-bottom pattern is forming — a level that has already attracted buyers on multiple prior tests.
The index recently fell to 98.85, down 0.33% from the previous session, extending a monthly decline of nearly 1%. That said, the dollar has still gained just over 1% over the past 12 months, showing the bigger trend remains far from a clean breakdown.
Several forces are pulling in opposite directions right now. On one hand, escalating US-Iran tensions and rising oil prices are keeping inflation risk firmly in view, which typically supports the dollar as a hedge. On the other, the European Central Bank is expected to raise interest rates this week, and markets are pricing elevated odds of a Federal Reserve rate hike too — both developments that cut against a straightforward dollar-strength narrative depending on how the relative pace of tightening plays out.
Why this matters beyond forex desks: DXY strength or weakness ripples directly into emerging-market currencies like the Indian rupee, and into commodity prices broadly, since most are dollar-denominated. A break below the 98.55 support zone would be a meaningfully bearish signal for the greenback; a bounce here keeps the broader 92–100 six-month range intact.
Sourced from Trading Economics and TradingView technical data, cross-checked across multiple sources. For informational purposes only — not investment advice.
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