Rising demand for safe-haven assets boosts the dollar

The dollar held firm against a basket of major currencies early Wednesday, bolstered by safe-haven demand amid the latest escalation in the Middle East.

The greenback’s two-day rebound from the strong 100 support zone pushed it to a two-week high, putting pressure on key resistance levels at 101.17/24 (the top of the recent consolidation range and the 23.6% Fibonacci retracement of the 105.78/99.84 downtrend). A break above this zone would signal an initial reversal, paving the way for a stronger recovery.

A move higher could target the 101.80 zone (previous support) and significant resistance at 102.11 (the base of the falling daily Ichimoku cloud and 38.2% Fibonacci retracement).

The technical outlook is improving, as the daily chart shows a break above the Tenkan and Kijun-sen lines, with momentum turning positive and forming a base around the 100 level, creating a bear-trap pattern. However, sustained closes above the daily Kijun-sen (100.84) are needed to maintain a bullish bias.

Fundamentally, rising geopolitical tensions are expected to continue supporting the dollar’s safe-haven appeal, with upcoming US labor data and the non-manufacturing PMI in focus for further market direction.

Res: 101.24; 101.84; 102.11; 102.81
Sup: 100.84; 100.48; 100.00; 99.84