Dollar Index steadies as sellers take a breather above new multi-week trough

The dollar edged modestly higher on Thursday as traders took profits following the recent decline, which accelerated over the previous three sessions and dragged the currency index to its lowest level since late February.

Oversold conditions on the daily chart triggered a corrective bounce, although the move is likely to represent only a temporary pause within the broader downtrend, as improving expectations for potential peace arrangements in the Middle East continue to reduce safe-haven demand for the greenback.

Markets also turned more cautious as investors paused for fresh headlines after the latest wave of optimism, while remaining aware that the current ceasefire and negotiation process remains fragile.

Initial resistance is seen around the 98.30 zone, where the daily cloud top converges with the 100- and 200-day moving averages. Any stronger recovery is expected to remain capped below 98.70, which marks the 38.2% Fibonacci retracement of the 100.48/97.59 decline and aligns with the falling 10-day moving average. Holding below these barriers would keep sellers in control for another attempt lower toward key support at the daily cloud base near 97.51. A break below this level would reinforce the bearish structure.

Daily technical studies remain negative, with strong bearish momentum and widening divergence between the Tenkan-sen and Kijun-sen after a bearish crossover, supporting the view that limited rebounds may offer better levels for renewed selling interest.

For now, geopolitical developments are likely to remain the primary driver of the dollar, with headlines from ongoing negotiations expected to shape the greenback’s near-term direction.

Res: 98.30; 98.52; 98.70; 97.95
Sup: 97.50; 97.31; 97.00; 96.56