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Published: 1 May 2026,10:10
Daily Market Analysis New
The US dollar index posted its worst monthly performance since June, as optimism surrounding potential peace talks to end the U.S.–Iran conflict prompted investors to unwind safe-haven positions.
Improving geopolitical sentiment reduced demand for the dollar, which had previously benefited from risk-off flows. As expectations for de-escalation increased, market participants rotated into risk-sensitive assets, weighing on the greenback.
Despite recent hawkish signals from the Federal Reserve, the upside for the dollar remained limited. This is largely due to other major central banks also maintaining relatively firm policy stances, which has narrowed yield differentials — a key driver of currency strength — and reduced the relative appeal of the US dollar.
Further downside pressure came from intervention by the Bank of Japan. Japanese authorities stepped into the foreign exchange market by selling US dollars and buying yen in an effort to stabilize their currency.
This intervention accelerated the decline in the dollar index, as large-scale selling of USD added to existing bearish momentum.
The combination of easing geopolitical risks, narrowing yield advantages, and direct currency intervention has driven a broad-based decline in the US dollar.Overall, the dollar’s recent weakness reflects a shift in market positioning, as investors reassess the balance between safe-haven demand and global monetary policy dynamics, with future direction likely to remain sensitive to geopolitical developments and central bank signals.
Technical Analysis
The dollar index is trading lower after a breakdown below the 98.45 support level, confirming a bearish shift in short-term structure.
Momentum remains negative, with the MACD expanding to the downside and the RSI at 35 below the midline, indicating continued selling pressure.
If bearish momentum persists, the index could extend losses toward the next support at 97.80, with further downside toward 97.40.
However, if selling pressure begins to fade, a technical rebound may occur, with prices likely to retest 98.45 as resistance.
Resistance Levels: 98.45, 98.85
Support Levels: 97.80, 97.40
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