The U.S. Dollar is poised for its fourth consecutive day of gains as it approaches the upper boundary of its September trading range amid safe-haven inflows driven by rising geopolitical tensions in the Middle East and a weaker Japanese Yen. The U.S. Dollar Index (DXY) is testing levels around 101.90, with potential breakout signals.
This strength in the dollar comes as Japan’s new Prime Minister Shigeru Ishiba indicated that the economy isn’t ready for another interest rate increase, contributing to a decline in the yen. Additionally, safe-haven flows have been supported by turmoil in Lebanon.
Market participants are preparing for a busy economic calendar, including weekly Jobless Claims and key PMI numbers, with expectations for steady data. Current projections indicate a 67.4% chance of a 25-basis-point rate cut by the Federal Reserve at its next meeting on November 7, with 32.6% pricing in a larger 50-basis-point cut.
Technically, the DXY has shown significant recovery, facing resistance at 101.90 and possibly reaching the 55-day Simple Moving Average at 102.09. If it breaks above this, the next significant level to watch is 103.18. Conversely, support is noted around 100.62, with the 2024 low at 100.16 potentially coming into play if the dollar falters.


