📊 Fundamental Context

The U.S. Dollar Index is trading near 98.96, retreating from the 99.70 panic peak earlier this week. The pullback reflects fading safe-haven demand after de-escalation signals from Donald Trump regarding the Middle East conflict. Cooling energy prices weakened the stagflation narrative that previously supported the dollar.

📊 Core Market Drivers

• Oil Correction: Brent Crude dropped roughly 11%, sliding from ~$119 toward the $90 range, easing inflation fears.

• Yield Retraction: The U.S. 10‑Year Treasury Yield eased from 4.30% → ~4.07%, reducing the dollar’s yield advantage.

• Rate-Cut Expectations: Markets are again pricing a 25 bps rate cut by Q3 2026 from the Federal Reserve after the cooler CPI reading.

📊 Key Technical Levels

Level Type Level Significance

Resistance (R2) 100.20 “War peak” supply zone

Resistance (R1) 99.50 Gap-fill from announcement

Pivot 99.00 Psychological level

Support (S1) 98.56 200-hour / 100-day MA

Support (S2) 98.33 200-day MA

Support (S3) 97.50 50% retracement

📊 Cross-Market Signals

• EUR/USD stabilizing above 1.1600, resistance 1.1680.

• USD/JPY rejected near 158.30, downside target 156.00.

• GBP/USD trading around 1.3440, resistance 1.3500.

📊 Tactical Outlook

Bearish Case:

As long as DXY remains below 99.00, the index likely tests 98.56 → 98.33.

Bullish Reversal Risk:

Renewed tension around the Strait of Hormuz could quickly push the index back toward 99.50.

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