Dollar Holds Near Key Support as Traders Weigh Global Risk Outlook

So far, the Dollar Index has made a nice recovery from the January lows, but the current pullback is taking longer and has become deeper than initially expected. Still, this could remain a counter-trend move from the March 13th highs, possibly a wave four, even as an irregular formation, with price now approaching support around 98.50. If we see a break below 98, then this may point to a higher degree correction, but even in that case, strong support is seen between 97.60 and 98.50. Around 97.60, we also have an unfilled gap, which could act as a strong bounce zone if reached.

Looking at the daily chart, there is still room for further upside, as the market may have already completed a higher degree five wave decline from the January 2025 highs. Even under an alternate count, where this move is wave C of a flat, there is still potential for a move toward 101 or slightly higher, possibly retesting the previously broken trendline support, that can later turn into resistance.

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