The US Dollar Index (DXY) is in a delicate dance, teetering between the 99.50 resistance level and the 98.72 support zone. This week, the DXY has been a rollercoaster, with traders eagerly awaiting the release of the US Nonfarm Payrolls (NFP) report, which could significantly impact the index's trajectory. The Israel-Lebanon truce has dented demand for the safe-haven US Dollar, prompting some profit-taking, while the ongoing tensions between the US and Iran over nuclear programs and the Strait of Hormuz keep geopolitical risks in the spotlight. The Middle East's volatile landscape, coupled with elevated oil prices, fuels inflation fears and bolsters bets for a rate hike by the US Federal Reserve (Fed), providing a safety net for the DXY. The index's struggle to break through the 61.8% Fibonacci retracement level of the March-May downfall adds to the intrigue. Despite this, the near-term bias remains bullish, with the USD holding above the 200-period Simple Moving Average (SMA) and key 50% Fibonacci levels. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) readings further support constructive momentum. However, the immediate upside is capped by the 61.8% Fibonacci hurdle at 99.50. A breakthrough beyond this level could unlock additional gains, targeting the 78.6% level at 100.00 and the recent swing high at 100.65. On the flip side, the first support is near the 50% retracement at 99.14, followed by a cluster of levels at 98.78 and 98.72. A deeper pullback would expose the 23.6% retracement at 98.35 and the structural floor at 97.63. This week's performance against major currencies highlights the DXY's strength against the New Zealand Dollar, with the US Dollar gaining 0.83% against the Japanese Yen. The heat map provides a visual representation of percentage changes between major currencies, offering a comprehensive view of the DXY's performance in the global market. As the NFP report looms, the DXY's fate hangs in the balance, with traders eagerly awaiting the next move.
