Dollar Index Bounces Back on Soft Inflation Data, Yet Critical 100‑Level Support Keeps Bulls Hopeful

The dollar index reclaimed ground after two days of losses, driven by softer‑than‑expected U.S. inflation readings for June (CPI and PPI) that dampened expectations for further Federal Reserve rate hikes.

On Wednesday the index broke a short‑term trendline at 100.40, hitting a one‑month low, but it held above the pivotal 100 level—key psychological and Fibonacci support—leaving larger bullish positions intact.

The daily technical set‑up is mixed, with conflicting moving averages, negative momentum and a neutral RSI, yet the fundamental outlook for the greenback remains positive.

The U.S. economy is faring better than many Western peers and is less exposed to energy shocks, reinforcing the dollar’s status as a primary safe‑haven asset that benefits from higher energy prices.

June’s mild inflation was tied to a temporary Middle‑East ceasefire, but renewed U.S.–Iran tensions and the closure of the Strait of Hormuz could reignite price pressures.

This environment partly offsets the risk of deeper dollar weakness while the price stays above the 100 level; a recovery above the broken trendline would likely signal a false breakout lower and strengthen near‑term structure.

For a confirmed bullish shift, the index would need to surge past the 20‑day moving average at 100.82 and continue higher.

Resistances: 100.48; 100.82; 101.12; 101.55
Supports: 100.12; 100.00; 99.50; 99.09

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