USD Index – Modest Pullback Likely Before Renewed Upside Momentum

The dollar continues to ease gradually after reaching a fresh one-year high, although downside pressure remains contained. Friday’s long-tailed daily candlestick highlights persistent buying interest on dips, reinforcing the currency’s underlying strength.

Month-end and quarter-end portfolio adjustments are prompting some profit-taking after the greenback advanced for two straight months and remains on course for its strongest monthly performance in nearly a year.

That said, traders may be reluctant to take more aggressive positions ahead of this week’s release of U.S. May labor market data. The figures are expected to provide further insight into the health of the U.S. economy as expectations grow for a September rate hike, with persistent inflationary pressures continuing to challenge the Federal Reserve.

The broader bullish trend remains firmly intact, suggesting that any near-term pullback could offer more attractive entry levels for the next leg higher in the dollar.

Initial support is seen at 100.70/60, where the 10-day moving average converges with the 23.6% Fibonacci retracement of the 97.44–101.55 rally. The psychologically important 100.00 level, reinforced by the 38.2% Fibonacci retracement, is expected to provide a solid floor, preserving the broader bullish outlook and paving the way for a renewed test of the 101.55 peak. A sustained break above this level could trigger an acceleration toward the 102.00 area and beyond.

Res: 101.55; 102.00; 102.40; 102.67
Sup: 100.81; 100.60; 100.38; 100.00