The U.S. dollar index (DXY), which tracks the dollar against a group of other currencies, is finding it tough to hold above the 99.50 mark and has slipped a bit from the nearly two-month high it reached earlier today. During early European trading, the index saw a modest decline, but it seems the downside is somewhat limited due to ongoing geopolitical tensions. Traders are particularly focused on the upcoming U.S. nonfarm payrolls (NFP) report scheduled for Friday.
A temporary ceasefire between Israel and Lebanon has lessened the demand for the safe-haven U.S. dollar (USD), leading to some profit-taking. Simultaneously, the U.S. and Iran continue to have conflicts over critical matters like Iran’s nuclear ambitions and the Strait of Hormuz. There are also lingering geopolitical risks due to renewed conflicts in the Middle East, with no significant Diplomatic progress between the two nations. Moreover, rising oil prices are contributing to inflation worries, increasing the likelihood of interest rate hikes from the U.S. Federal Reserve—this situation could help prevent further declines in the DXY, something bearish traders should consider.
The index has had a hard time breaking past the 61.8% Fibonacci retracement level established between March and May. That said, the short-term outlook still leans toward the optimistic, as the USD remains above the 200-period simple moving average (SMA) and the critical 50% Fibonacci level on the 4-hour chart. Additionally, the Relative Strength Index (RSI) is around 61, and the slightly positive readings from the Moving Average Convergence Divergence (MACD) indicate some encouraging momentum.
However, the near-term upside is likely to be limited by the 61.8% Fibonacci level, particularly around 99.50 points. If the index can maintain strength above this, it could potentially lead to further gains towards the 78.6% level at 100.00 and the recent high of 100.65. On the flip side, initial support is expected around the 50% retracement near 99.14, followed by a cluster at the 38.2% level at 98.78 and the 200-period SMA at 98.72. A deeper pullback could reveal the 23.6% retracement at 98.35 and the structural low close to 97.63.
DXY 4 hour chart
USD price this week
The table below displays how the U.S. dollar (USD) has changed against major currencies this week, showing that the dollar performed strongest against the New Zealand dollar.
| USD | EUR | GBP | JPY | CAD | australian dollar | new zealand dollar | swiss franc | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.39% | 0.24% | 0.32% | 0.83% | 0.50% | 1.74% | 1.30% | |
| EUR | -0.39% | -0.15% | -0.07% | 0.43% | 0.11% | 1.37% | 0.91% | |
| GBP | -0.24% | 0.15% | 0.13% | 0.59% | 0.26% | 1.53% | 1.05% | |
| JPY | -0.32% | 0.07% | -0.13% | 0.52% | 0.22% | 1.43% | 0.96% | |
| CAD | -0.83% | -0.43% | -0.59% | -0.52% | -0.33% | 0.91% | 0.46% | |
| australian dollar | -0.50% | -0.11% | -0.26% | -0.22% | 0.33% | 1.26% | 0.80% | |
| new zealand dollar | -1.74% | -1.37% | -1.53% | -1.43% | -0.91% | -1.26% | -0.47% | |
| swiss franc | -1.30% | -0.91% | -1.05% | -0.96% | -0.46% | -0.80% | 0.47% |
The heat map illustrates the percentage changes among major currencies, with the base currency selected from the left column and the quote currency from the top row. For instance, if you choose USD from the left side and look at the horizontal row to the Japanese Yen, the displayed percentage change represents USD (base)/JPY (valuation).
