• The DXY trades near 101.00, supported by firm US Treasury yields and expectations that the Fed could keep monetary policy restrictive for longer.
• US PCE inflation is the key upcoming catalyst, as a stronger reading could reinforce expectations of tighter policy, while softer data may trigger profit-taking in the Greenback.
• Uncertainty around the Iran war adds support to the Greenback, with geopolitical risks keeping demand for safe-haven assets elevated.

The US Dollar Index (DXY), which measures the value of the Greenback against a basket of major currencies, is trading near the 101.00 area on Monday, up 0.26% on the day at the time of writing.

The US issued a temporary 60-day license allowing Iranian oil sales as part of ongoing peace negotiations, while Iran reportedly committed to allowing International Atomic Energy Agency (IAEA) nuclear inspectors and keeping the Strait of Hormuz open. Those developments pushed Oil prices lower and eased some fears of a wider supply shock, which can limit USD demand as a haven.

Market attention now turns to the upcoming US Personal Consumption Expenditures Price Index (PCE), the Fed’s preferred inflation gauge. A stronger-than-expected reading could reinforce expectations of tighter monetary policy and help the DXY retest the 101.00 area.

On the other hand, a softer PCE print could weigh on the Dollar and trigger some profit-taking, especially after the index’s recent advance toward yearly highs.

Short-term technical analysis:

On the 4-hour chart, Dollar Index Spot trades at 101.01, maintaining a bullish near-term bias as it holds above the 20-period Simple Moving Average (SMA) at 100.70 and the 100-period SMA at 99.81. The cluster of nearby horizontal supports around 100.99, 100.86 and 100.81 reinforces the constructive structure, while the Relative Strength Index (RSI) hovers near 69, suggesting strong but increasingly stretched upside momentum.

On the topside, immediate resistance emerges at 101.06, where a horizontal barrier caps the recent advance. On the downside, a break below the 100.99 pivot would expose the 100.86 and 100.81 support band, with the 20-period SMA at 100.70 offering additional backing ahead of the deeper 100-period SMA base near 99.81.

(The technical analysis of this story was written with the help of an AI tool.)