US Dollar Index: Consolidation below key resistance – OCBC

OCBC’s FX Strategist Christopher Wong notes the Dollar Index eased as lower UST yields and softer Oil prices reduced safe-haven demand, with the Federal Open Market Committee (FOMC) minutes adding no new hawkish impulse. He highlights ongoing bullish daily momentum but signs of an overbought reversal. US Dollar Index (DXY) is consolidating, with resistance around 99.40 and 100.50/60 and support clustered between 98.30 and 97.50.

Dollar rebound loses some momentum

"USD eased overnight, taking cues from softer yields while oil prices slipped. The FOMC minutes offered no major surprises. The Fed still sounded patient, with officials focused on inflation risks and not yet prepared to validate near-term easing. There was also some acknowledgement that energy prices and Middle East tensions had added uncertainty to the outlook. "

"The more important point for markets was that the minutes did not add fresh fuel to the recent hawkish repricing. Overnight price action was instead led by the pullback in oil and yields, which helped risk proxies recover and help took some momentum out of the recent USD rebound."

"DXY was last at 99.10 levels. Daily momentum is bullish while RSI showed tentative signs of turnaround from near overbought conditions."

"Price action past few sessions saw some consolidation, with 99.40 (23.6% fibo) provide key resistance in the interim, before 100.50/60 levels (2026 high). Support at 98.30/50 levels (21, 100, 200 DMAs), 98.10 (50% fibo retracement of 2026 low to high) and 97.50/60 levels (double bottom, 61.8% fibo retracement of 2026 low to high)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)