Dollar Index retests key resistance levels following a period of consolidation.

The dollar regained momentum on Tuesday following the previous session’s sharp decline, as the Dollar Index once again tested the key resistance zone at 99.20/30, marked by the 61.8% Fibonacci retracement of the 100.48/97.40 decline and the top of the daily Ichimoku cloud, where rallies had repeatedly stalled over the past two sessions.

Ongoing geopolitical uncertainty and shifting expectations for Federal Reserve policy continue to support the greenback, with rising US inflation strengthening speculation that the Fed could deliver another rate hike in the coming months.

The index advanced nearly 0.5% by mid-US trading on Tuesday and remains on track to generate a strong bullish signal if it closes above the immediate barriers, which would also confirm continuation of the broader recovery following a brief two-day consolidation phase.

The next upside targets are seen at 99.75, the 76.4% Fibonacci retracement, followed by the key psychological level at 100.00. On the downside, the daily cloud top now acts as immediate support, ahead of 98.94, the previously broken 50% Fibonacci level, and 98.80, a higher base reinforced by the 55-day moving average.

The bullish technical structure is additionally supported by the formation of bullish crosses, with the 10- and 20-day moving averages crossing above the 100- and 200-day averages, while strengthening positive momentum continues to underpin the outlook, despite early warning signs from overbought stochastic indicators.

Res: 99.75; 100.00; 100.26; 100.48
Sup: 99.20; 98.80; 98.58; 98.35