Dollar under pressure as renewed caution revives safe-haven flows and challenges support levels

The US dollar came under renewed pressure on Wednesday after a fresh wave of optimism over a potential end to the US-Iran conflict reduced safe-haven demand.

The US Dollar Index slipped to a three-week low as it once again tested a key trendline support around $97.85, with multiple recent attempts failing to produce a decisive breakdown.

This support zone is further reinforced by the base of a thick daily Ichimoku cloud and the 50% retracement of the $95.35/$100.48 rally, increasing its technical significance.

A sustained break lower is needed to confirm a bearish signal and resume the broader downtrend from the $100.48 peak (2026 high, posted on March 31), which would then expose the next downside target at $97.31 (Fibo 61.8%).

However, caution remains over the possibility of repeated rebounds from trendline support. Still, near-term bias continues to lean to the downside as daily indicators remain firmly bearish, supported by 20/200DMA and 20/100DMA bearish crossovers and weakening 14-day momentum entering negative territory.

Market participants are also closely monitoring developments in Middle East peace talks, as geopolitical headlines continue to act as a key driver of dollar sentiment.

Res: 97.90; 98.20; 98.43; 98.52
Sup: 97.50; 97.31; 97.00; 96.56