Key Points
- USDX traded near 99.57, recovering after falling to a one-week low in the previous session.
- Traders questioned whether a US-Iran peace deal is close, lifting short-term demand for the dollar.
- The next key levels sit at 99.60 resistance and 99.46 support.
USDX found support in Asian trade on Friday, recovering part of the previous session’s decline as traders reassessed hopes for a Middle East ceasefire.
The dollar index steadied after falling to its weakest level in a week on Thursday. The rebound came as markets questioned whether the United States and Iran were close to signing a peace deal that could reopen the Strait of Hormuz.
The dollar also gained against major peers. USDJPY rose 0.2% to 160.235, while AUDUSD slipped 0.1% to 0.7045 and NZDUSD fell 0.2% to 0.5824. EURUSD held near 1.1574 after the European Central Bank delivered its first rate hike in three years.
Why Traders Are Watching This
Traders are watching USDX because the dollar is caught between lower energy prices, sticky inflation data, and uncertainty around Middle East negotiations.
Brent crude fell 1.8% to $88.76 after President Donald Trump said the United States and Iran could sign a peace deal as soon as this weekend. Iran, however, said it had not reached a final decision. That kept markets cautious and helped the dollar stabilise.
US producer prices rose more than expected in May, with the annual gain reaching its fastest pace in three and a half years. However, the core PPI reading came in softer than expected at 4.9% year-on-year, below the 5.4% forecast.
That softer core reading helped calm some inflation fears. Fed funds futures now show a 63.3% chance that the Fed keeps rates on hold at its October meeting, compared with roughly an even chance the day before.
Key Trading Levels
| Level | What Traders Are Watching |
| 100.05 | Previous upper swing and wider recovery level |
| 99.9 | Stronger resistance from the chart |
| 99.6 | Intraday high and immediate resistance |
| 99.57 | Current trade zone |
| 99.56 | 5-period moving average |
| 99.53 | 20-period moving average |
| 99.52 | 10-period moving average |
| 99.46 | Intraday support |
| 99.29 | Lower chart support |
USDX is trading just above its short-term moving averages, with the 5-period MA at 99.556, the 10-period MA at 99.521, and the 20-period MA at 99.526.
That keeps the short-term recovery alive, but the setup remains cautious. The index is still well below the previous swing high near 100.05, and the rebound needs stronger follow-through above 99.60 to build momentum.
A break above 99.60 could support a move toward 99.90. A drop below 99.46 would weaken the recovery and bring 99.29 back into focus.
Bullish and Bearish Setups
| Setup | Trigger | Potential Market Reaction |
| Bullish Recovery | Move above 99.60 | Buyers may target 99.90 |
| Breakout Setup | Move above 99.90 | Momentum may extend toward 100.05 |
| Pullback Setup | Hold above 99.52 | Traders may watch for renewed buying interest |
| Bearish Break | Move below 99.46 | Sellers may target 99.29 |
The bullish setup depends on USDX holding above the moving average cluster and breaking 99.60. That would show buyers are willing to extend the rebound after Thursday’s sell-off.
The stronger breakout setup needs a move above 99.90. If buyers clear that area, the previous high near 100.05 becomes the next level to watch.
The bearish setup builds if USDX falls below 99.46. A break under that level would suggest the rebound is fading and could return pressure to the dollar index.
Disclaimer
The price levels and trade scenarios above reflect the author’s view at the time of writing and do not represent financial advice or an official recommendation from VT Markets. Traders should conduct their own analysis and manage risk carefully.
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What To Watch Next
Traders should watch 99.60 resistance and 99.46 support.
A break above 99.60 could strengthen the recovery and bring 99.90 into focus. A move below 99.46 would weaken the short-term setup and shift attention back toward 99.29.
Beyond the chart, traders should watch US-Iran peace deal updates, oil prices, Fed rate expectations, and whether softer core inflation data continues to calm rate-hike concerns.
FAQs
Why is the US Dollar Index Rising Today?
The US Dollar Index (USDX) is rising as traders question whether a US-Iran peace deal is close. The uncertainty has helped the dollar recover after falling to a one-week low in the previous session.
What Is The Key Level To Watch For USDX?
The key upside level is 99.60. A move above this area could support a recovery toward 99.90. On the downside, 99.46 is the first major support level.
Can USDX Continue Higher?
USDX could continue higher if buyers hold above the moving average cluster near 99.52 to 99.56 and push price above 99.60. A stronger move would need a break toward 99.90.
What Could Push USDX Lower?
USDX could move lower if a Middle East peace deal is confirmed, oil prices fall further, or traders reduce Fed rate-hike expectations. A break below 99.46 would weaken the short-term setup.
Can I Trade USDX With VT Markets?
Yes. VT Markets offers access to USDX CFDs, allowing traders to take a view on rising or falling US dollar index moves without owning the underlying currency basket. Traders can also access forex, gold, oil, indices, shares, ETFs, and other CFD markets from one platform.
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