Today, the US Dollar Index rose above the 98.70 level for the first time since the third week of January. Monday’s trading opened with a bullish gap, and upward momentum continues to build as news emerges of a major escalation in the Middle East:
- → Demand for safe-haven assets: Historically, the US dollar and US Treasury bonds have served as primary refuges for capital during periods of heightened uncertainty.
- → Military activity around the Strait of Hormuz is pushing oil prices higher (WTI jumped by approximately 10% yesterday) along with gas prices. This creates a direct pathway to another wave of global inflation.
Technical Analysis of the DXY Chart
Six days ago, when analysing the US Dollar Index (DXY) chart, we:
- → Reaffirmed the validity of the descending channel (marked in red), which originated in November 2025.
- → Once again highlighted the strength of demand, reflected in the confident upward trajectory (shown by the arrow) following the false break below the multi-month low of 96.50 at the end of January.
- → Suggested that bulls could regain momentum and break the prevailing downtrend.
Indeed, price action in early March confirms this view: the descending channel is losing relevance, being replaced by an upward trajectory marked in blue. In this context, developments in the Middle East are of critical importance:
- → If tensions begin to ease, the DXY may stabilise around the median line of the blue ascending channel.
- → A renewed escalation and the collapse of potential negotiations could trigger a further advance towards the upper boundary of the blue channel.
It is also worth noting that the area around the 98 level may now serve as support:
- → This zone previously saw rapid price appreciation, signalling strong buying pressure.
- → It was also the point of a bullish breakout from the red channel and above the 97.98 resistance level.
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