USD Double Top as Markets slowly price end of War – US Dollar Index (DXY) outlook

• The US Dollar enjoyed a very consistent performance since the onset of the US-Iran conflict but now forms a double-top
• With Traders starting to price a resolution for the conflict, the Dollar could lose some steam, particularly at the top of its range
• US Dollar Index (DXY) in-depth Technical Analysis

Timing Markets is a difficult task, absolutely key to generating as much profit as possible from important fundamental setups.

It is indeed important to be timely with your trade to ensure that entries remain favorable and the risk-reward remains positive – but an essential part of timing is not being too early.

The US Dollar has been on a significant uptrend since the end of the January FOMC (as forecasted here) and is now testing the extremes of its gigantic 95.50-100.50 range.

This is where timing entries is a daunting task – one could just begin shorting the US Dollar as soon as it reaches its highs, but when double tops occur, they often come to get your stops.

That is when confirmation steps in to provide even more favorable entries and timing – It can be Fundamental, with a change in narrative (something that is kind of emerging as of late), or a confirmation in Technicals.

Sometimes it can actually be both, and this is what could now be offered in the US Dollar.

Nothing is sure in Markets, particularly during volatile periods when breaking news can change the entire picture in a matter of a few seconds – but at least, some setups can look better than others.

As we speak, the US Dollar is rejecting its War highs for the third consecutive test, forming a Double Top – Both the US and Israel are slowly looking to turn the page on the full month of operations, particularly with the Trump Administration considering ending the conflict without taking control of the Strait of Hormuz to punish against European and Asia allies that did not manifest their appetite for such operations (and even went against it, like Spain).

The reversal, if it does arrive, may not unfold in one session but progressive waves as the narrative slowly switches.

Crude Oil prices still dictate general Market flows, so its drop will have to be the extra confirmation signal.

We’ll explore a few scenarios for a potential large reversal in an in-depth technical analysis of DXY.

Discover:

• Markets Today: China factory activity surges, French inflation jumps, FTSE 100 eyes further gain as data releases lie ahead
• Is the War really reaching its end? Assets bounce despite Oil rally – Market Check
• Q2 2026 US Indices (Dow Jones, S&P 500 & Nasdaq 100) Outlook – Resilience or retracement?

While headline chasers are getting fooled by the latest dedollarization and end of the World narrative, as traders it is essential to take a step back, mute the noise, and see if any real trend is emerging to avoid falling into Confirmation Bias loops and miss on significant opportunities.

For example, the same happened after the pre-FOMC Trump-led US Dollar flash-crash, where the world of Finance could have swore as a whole that the USD was finished.

Yet here we are at 6-month highs. The significant range established after the July 2025 TACO Dollar lows is still holding (despite having wicked above and below).

Now reacting at its highs, it will be interesting to see if a downside reversal occurs from here, particularly after the double top and a Daily RSI bearish divergence.

The Dollar is officially rejecting its 100.50 War highs, forming the famous double top, with momentum quickly shifting.

As long as prices remain within the 100.00 to 100.50 Zone, the action is more balanced than bearish, hence it could be a decent time to look around Markets for interesting setups – Two elements to look for are:

• Are buyers returning at short-term support levels ?(4H 50-MA & January Uptrend ~ 99.70)
• If they don't, what is the most optimal FX pair to trade to capture the potential reversal?

• In that event, look for trades expressing this view in other FX pairs (AUD/USD, USD/JPY, USD/CAD?)
  • And don't forget that such reversal don't occur in one swift move! They also have pullbacks and more.

Levels to place on your DXY charts:

Resistance Levels

• 100.00 to 100.50 Main resistance and Range highs
• War Highs 100.544 (Double Top)
• May 2025 Resistance 101.30 to 101.80
• Major Weekly Resistance 102.50 to 103.00

Support Levels

• 99.70 mini-support
• 99.40 to 99.50 Momentum Pivot (bearish below)
• 98.70 to 99.00 Support
• 98.00 Key Mid-Range Support
• Support 97.40 to 97.60
• 2025 Lows Major support 96.50 to 97.00

The US Dollar is now slightly mean-reverting after quickly reaching oversold 1H RSI levels – look for a small retracement for entries on Major FX pairs.

Psychological levels tend to attract decent reactions in FX, returning to the 50-hour MA (100.30) would provide an optimal short-USD setup, as long as the narrative doesn't switch again and the war drags on for much longer.

To void the short-setup, watch if bulls manage to drag the Dollar above 100.55 and close above it on the daily.

Safe Trades!

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