Strong economic data and geopolitical uncertainty underpin the USD

The US Dollar Index (DXY), which measures the value of the US dollar (USD) against a basket of six major global currencies, continues to exhibit a bullish trend. This upward momentum has been driven by stronger-than-expected US economic data and renewed geopolitical tensions in the Middle East. On early Wednesday, tensions escalated in the Gulf region following an exchange of fire between the US and Iran amid stalled peace negotiations.

This renewed conflict has heightened demand for safe-haven assets, supporting the US dollar’s strength. Additionally, the US dollar has gained further strength amid growing expectations that the Federal Reserve may raise interest rates to combat inflation.

Resilience in the US Labor Market

The US dollar has remained steady above the 99.00 level, bolstered by robust labor market data. The April JOLTS job openings report exceeded expectations, indicating structural strength in the US labor market. Job openings surged unexpectedly to 7.62 million in April 2026, reaching the highest level since mid-2024 and significantly surpassing market forecasts of 6.8 to 6.9 million.

Key Data Releases Ahead

The US ADP employment report and ISM services PMI figures are the primary focus during the New York trading session on Wednesday, potentially influencing the Federal Reserve’s interest rate decision later this month. Stronger-than-expected results could increase market volatility and bolster the US dollar. Additionally, several central bank officials are scheduled to deliver remarks on monetary policy today, making it important to monitor live updates for further insights.

Dollar (DXY) Technical Outlook

Technically, the daily chart indicates that the price remains in the midst of a recovery from the recent drop, and the broader market sentiment will play a crucial role in this recovery. While the technical trend remains upward, failure to maintain levels above 99.60 could prompt profit-taking on long positions. Any significant pullback is expected to find support near the 98.80/60 area. A decisive bearish shift would require a daily close below 98.00; otherwise, bullish momentum is likely to continue after a consolidation phase.

 

Warning! This material is not intended as investment advice. Past performance data does not guarantee future returns. Investing in foreign currencies may affect your returns due to their fluctuations. Any transaction in securities may result in both profits and losses. The assumptions and expectations set forth in this material are only estimates that may not be accurate and may change depending on current economic conditions. These statements do not guarantee future returns.