Dollar Index – recovery extends as bulls test critical resistances

The dollar index strengthened on Wednesday, hitting a weekly high and showing resilience despite renewed political turmoil at the Federal Reserve following President Trump’s dismissal of Governor Cook.

Fresh upside momentum brought the index back to test the falling 100DMA at 98.60. A decisive break above this level, along with the nearby lower top at 98.71 (Aug 22), would confirm a bullish signal and pave the way toward the key barrier at 98.88 (daily cloud top / 50% Fibo retracement of the 101.80–95.97 decline).

The technical backdrop on the daily chart has improved as prices climbed above the converged 10- and 20DMAs, while momentum indicators are strengthening—RSI has moved above the neutral line and 14-day momentum continues to rise into positive territory—supporting a bullish outlook.

However, failure to clear the 100DMA and cloud top would leave the index confined within its current 98.71–97.58 range, keeping near-term direction uncertain.

Investors now turn their focus to Friday’s release of the US PCE index, the Fed’s preferred inflation gauge, followed by next week’s July labor market report, both expected to provide critical clues for the September policy meeting.

Res: 98.60; 98.88; 99.00; 99.57
Sup: 98.20; 98.05; 97.80; 97.62