The US Dollar is stalls as the world awaits Ceasefire news – DXY Outlook

• The US Dollar stalls its correction as Traders hold their breath, awaiting for Ceasefire news
• After a 2.50% correction in the Dollar Index, FX remains quite stuck
• US Dollar Index (DXY) in-depth Technical Analysis

The US Dollar is under some complex dynamics, still moving along with Crude Oil prices, and both are just stuck in the mud.

The talks, supposed to begin today in Islamabad, haven't made it to the news yet, so it seems that there are some delays – The US is still eager to reach a deal, but Pete Hegseth, Head of the Department of War just issued a address to reaffirm that the most powerful army is "to restart combat if Iran doesn't agree to a deal".

Amid the borderline-insane price action in the Stock Markets, with two of the three Major Indexes reaching all-time highs (Nasdaq just set a new record in overnight trading), Participants are taking a break to await clearer developments.

After all, at current levels, whether for the USD, Stocks, or WTI, risks to the upside and downside are both extreme.

For now, Crude has stopped its move to the downside and is even moving higher, keeping the broader Market awaiting – You can see how significant the WTI-Dollar correlation has remained throughout the entire Ceasefire.

Hence, tracking Oil is almost more important than the headlines themselves for Forex trading.

Stock markets, on the other hand, did own heavily, lifting, having relatively decoupled from Black Gold, but will be looking at the commodity for the next phase.

In terms of pure geopolitics, the Israel-Lebanon talks under US supervision seems to be progressing smoothly, with a potential ceasefire in the coming hours/days.

Hezbollah will have to be put on the side, and they are reportedly exerting heavy pressure to not enter into deals with Israel. The terrorist organization has prevented deals ever since 1993, the year when Jordan and Israel reached a Peace deal that has held since.

There have been reports that there are no more deadlocks in the US-Iran mediated negotiations – But these headlines haven't been as decisive to provide further clarity on the situation. Hence, from here, all that traders will wait to see is a proper resolution.

With WTI now catching a bid, the US Dollar is extending higher on the session, with moves still quite timid for now.

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

Discover:

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• Cable eyes 1.3696 after reclaiming key moving averages, bulls defend 1.3500

In the bigger picture, the large 95.50 to 100.00 range is holding extremely well, with a double top last at the most recent test that led to the ongoing correction in the US Dollar.

As always, it is more than advised to keep an eye on the bigger timeframes to see if any particular trend dictates the price action, as they offer some setups and allow to reduce if not discard the noise.

After the 2.50% correction, the move is stalling and this comes right around the middle of the range, an important level for the bull/bear intermediate outlook.

The Dollar Index is forming an immediate bullish divergence, boosting prospects for an immediate pullback higher.

The 98.50-98.70 War Pivot and Psychological level would offer strong opportunities in to rejoin the trend in other FX pairs.

Extending to 98.80 (4H 50-period MA) offers the best entries, however, any close above could entice a pursued rally in the USD.

Keep a close eye on other FX pairs to position yourself – GBP/USD, USD/CAD and USD/JPY offer favorable setups on pullbacks.

Levels to place on your DXY charts:

Resistance Levels

• 98.50 to 98.70 War Pivot
• 98.80 4H 50-period MA
• 99.40 to 99.50 Resistance
• 100.00 to 100.50 Main resistance and Range highs
• War Highs 100.544 (Double Top)

Support Levels

• 98.00 Major Support (rejecting)
• Support 97.40 to 97.60
• 2025 Lows Major support 96.50 to 97.00
• Range lows at Early 2022 Consolidation just below 96.00

Safe Trades and keep track of the latest headlines!

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