What Happened
The US Dollar Index (DXY) — a measure of the US Dollar against six major currencies including the Euro and Japanese Yen — is holding steady around 98.30 during Asian trading on Wednesday. This follows two straight sessions of gains, with markets pausing as traders digest President Trump’s latest threats against Iran.
Key Levels
- Support 1: 97.80 — a recent consolidation floor that held during last week’s dip
- Support 2: 97.20 — a stronger structural level from mid-April lows
- Resistance 1: 98.80 — where the DXY stalled on its previous recovery attempt
- Resistance 2: 99.50 — a key psychological and technical ceiling not tested since late March
Technical Picture
The DXY remains in a broader downtrend that has been in place since early 2025, trading below its 50-day and 200-day moving averages. The two-day bounce off the 97.20 area has offered some near-term relief, but the index has yet to reclaim territory that would suggest a genuine trend reversal. Momentum indicators suggest the market is in a neutral-to-cautious zone — neither oversold enough to trigger aggressive buying nor strong enough to push through resistance.
What Traders Are Watching
The critical level to watch on the upside is 98.80. A clean break and daily close above this level could open the door toward 99.50, which would signal a more meaningful recovery. On the downside, a failure to hold 97.80 support would put the April low of 97.20 back in play. Geopolitical headlines around US-Iran relations are the wildcard — any escalation could spark safe-haven flows that both lift the Dollar and boost gold.
Bias
Neutral. The DXY is caught between geopolitical support and a well-established downtrend. Until price breaks clearly above 98.80 or falls below 97.80, this market is in a wait-and-see mode.
Source: FX Street