Is the Petrodollar trade over after Trump's comment? EUR/USD, AUD/USD and Dollar Index (DXY) overview

The US Dollar has been on a significant run since the beginning of the US-Iran-Israel war, quickly breaching its prior 2026 records.

When the night falls, the wolves step out – Dollar bears had dominated the narrative since early 2025 and have kept insisting on a weaker dollar despite largely rangebound action since July.

This bearishness had largely been covered throughout our previous Dollar analyses and reached a peak after the recent Bank of America's Fund Manager survey.

When the Market is short and a catalyst for shortage lands, it leads to explosive moves, and that's precisely what happened with the USD.

The US-Iran war sparked a swift need for dollars to protect against currency volatility, particularly to purchase oil at a much higher price. Hence, firms and institutions require dollar hedging to defend against a double-edged squeeze.

This added to the Momentum throughout last week's Globex Open and this week's spike.

In case you missed the historic moves, WTI and Brent Oil prices have moved 25% on both sides throughout the overnight and morning session and are now settling closer to $95 as G7 nations expressed a desire to control the situation by releasing strategic reserves, as Maritime traffic near the Strait of Hormuz slowly picks up again.

Note: Things just took an unexpected turn as I just posted this chart, Oil gapped lower to $83 – Remaining below $85 would bring back sellers in control, but tomorrow's close will be necessary; Expect volatility to remain high before that.

We will look at the Dollar Index, EUR/USD, and AUD/USD to assess the current state of the Market and whether more upside is warranted for the Dollar after its Market-sweeping rises.

Discover:

• Stock Markets attempt rally after overnight War tumble, Oil back to $100 – US Index Outlook
• Crude prices skyrocket by +30%, stock markets tumble & week ahead preview
• Gold’s (XAU/USD) Tug of War: : Oil spike, rate fears, and the battle for control

The US Dollar just took a swift turn lower after the Market shaking Trump announcement.

The overnight/morning action now points towards a clear double-top, pointing at a drop back towards 98.00, however, the 200-Hour MA (98.56) could act as support, so a rebound there will have to be monitored!

Three levels are to be watched:

• The 98.56 200-Hour MA – Bouncing from here would maintain the rangebound picture in the Dollar (which would invite to trade ranges in related USD Pairs)
  • Breaking the level lower points to:
• 98.00 – The pre-War resistance. As long as prices remain above this level, the outlook for the Dollar is neutral and could still see a grind back towards 99.00
• Morning highs: 99.70 – Breaking back above would imply further chaos in the Middle East, hence, could see a breakout back towards November highs at 100.376.

Levels of interest for the Dollar Index:

Resistance Levels

• Morning Spike 99.70 and Double Top
• 99.40 to 99.50 January Resistance
• 100.00 to 100.50 Main Resistance Zone
• 100.376 November highs

Support Levels

• 98.70 to 99.00 Key Pivot (acting as mini-support)
• 98.56 200-Hour MA
• 98.00 Key Mid-Range Support
• December Lows 97.75
• 97.40 to 97.80 August Range Support
• 2025 Lows 96.40 to 96.80 Support

AUD/USD is attempting a bounce but is facing resistance at its 4H 50-period MA (0.7060) – closing above the MA in tomorrow's session should launch it back towards the February highs (0.7140).

Levels of interest for AUD/USD:

Resistance Levels

• Immediate Resistance 4H MA 50 – 0.7060; Bullish above
• 2023 Highs from 0.71 to 0.7150 Resistance (next resistance)
• 0.71470 February highs
• June 2022 Extremes 0.72 to 0.7230

Support Levels

• 0.69566 Overnight lows
• 0.69 to 0.6945 Early Feb Support (if War drags on, could return here)
• Micro-support 0.6850 (+/- 30 pips)
• October 2024 Mini-support 0.6750 (+/- 100 pips)

EUR/USD is now bouncing off of its clean downward channel – It will also face its 4H 50-period MA (1.16730).

If it breaks above, keep a very close eye on the downward channel top around 1.1750 to spot if the Channel holds.

Levels to place on your EUR/USD charts:

Resistance Levels

• 1.1640 to 1.1680 Resistance (4H 50-MA)
• 1.1750 mini-resistance and Channel Top
• Resistance Zone around 1.18 (+/- 150 pips)

Support Levels

• 1.1580 to 1.16 Key Pivot
• Overnight and Channel lows 1.15065
• 1.1470 to 1.15 Pivotal Support
• 1.1350 to 1.14 Support

Safe Trades and keep a close eye on Middle East developments!

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