Dollar Index Advances to Highest Level in Two Months on Hawkish Fed Outlook

The US dollar index remains firmly on the front foot, trading near its highest level in two months as expectations of additional Federal Reserve rate hikes continue to strengthen. The greenback has so far shrugged off the impact of declining oil prices, which could help ease inflationary pressures.

A break above the key Fibonacci barrier at 100.32, representing the 61.8% retracement of the 101.48/98.44 decline and coinciding with the top of the descending daily Ichimoku cloud, has generated a fresh bullish signal.

A daily close above this level would confirm the breakout and keep the bullish outlook intact, paving the way for a move toward 100.76, the 76.4% Fibonacci retracement. Beyond that, the psychological 101.00 mark and the key resistance at 101.48, the July 28 peak and second-highest level of 2026, come into focus.

The broader technical picture remains supportive, with price action holding above the Ichimoku cloud, momentum indicators maintaining a strong positive bias, and moving averages aligned in a bullish configuration. However, overbought conditions could temper the pace of the advance and trigger periods of consolidation.

On the downside, any pullback should ideally remain above 100.32, which has now turned into solid support. A sustained move back below the 100.00 level would weaken the near-term bullish structure.

Meanwhile, investors remain attentive to developments in the Middle East, particularly progress in US-Iran peace talks, as geopolitical headlines continue to be an important driver of market sentiment.

Res: 100.59; 100.76; 101.00; 101.48
Sup: 100.32; 100.00; 99.75; 99.42