Dollar Index Nears Two-Month Peak as Fed Rate Hike Expectations Build

The dollar index continues to advance, trading near its strongest level in two months on rising expectations of additional Federal Reserve rate hikes. The currency has remained unfazed by declining crude oil prices, which could help temper inflationary pressures.

A decisive break above the Fibonacci resistance at 100.32 (the 61.8% retracement of the 101.48/98.44 range, which also coincides with the top of the descending daily Ichimoku cloud) has generated a fresh bullish signal.

A sustained close above this threshold is required to confirm the setup and keep buyers fully engaged, with next targets at 100.76 (the 76.4% Fibonacci level), followed by the psychologically significant 101.00 level and the key barrier at 101.48 — the July 28 peak and the second-highest reading in 2026.

Bullish daily technical indicators — including price holding above the cloud, robust positive momentum, and moving averages in a fully bullish configuration — underpin the optimistic outlook, though overbought conditions could temper near-term momentum.

Pullbacks should find solid support at 100.32, while a break back below the 100.00 mark would undermine the near-term bullish structure.

Market participants will also keep a close eye on developments in the Middle East, particularly the progress of US-Iran peace talks, which represent another significant driver for the index.

Res: 100.59; 100.76; 101.00; 101.48
Sup: 100.32; 100.00; 99.75; 99.42

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