The dollar index held above 100 as Middle East tensions boosted haven demand and reinforced expectations the Fed will keep rates elevated. The 2026 peak at 101.55 is the next upside target.
The dollar index opened higher Monday, then gave back the early gains to trade in a roughly 50-cent range. A fresh escalation in the Middle East pushed haven demand higher and reinforced expectations that the Fed will keep rates elevated for longer, traders said. News that large pension funds are rotating back into the dollar after last year's migration added to the bid.
The broader trend shows the index climbing off the 2026 low at 95.35 inside a bull channel. The daily chart, however, shows a narrow sideways band capped at the 38.2% Fibonacci retracement of the 110.00/95.35 decline, near 100.94, and supported by the daily Kijun-sen at 100.32.
Daily momentum studies remain mostly bullish, though the 14-day momentum oscillator slipped into negative territory. That could keep near-term action choppy and leave the downside exposed to a test of the trendline support at 100.29, traders said.
The bullish structure is intact as long as the index holds above that trendline, keeping focus on the 2026 peak at 101.55, the highest since early November 2025. A break above that level would signal continuation of the uptrend from 95.35 and open the path to 101.80, the May 12, 2025 peak, and then 102.67, the 50% retracement of the 110.00/95.35 move.
A break below the 100 level, a psychological mark and the 38.2% Fib of the 97.44/101.55 upleg, would sideline bulls and risk a deeper pullback, traders said.
Resistance: 101.04; 101.55; 101.80; 102.67. Support: 100.55; 100.29; 100.00; 99.50.
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