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Dollar eases from monthly peaks, returns toward 101.30 ahead of the Fed

The DXY pulled back after getting stuck near the 101.60-101.70 area, even as it stayed above the 200-day SMA around 99.1 to 100.3.

Reported · Written up by our desk · Major Pairs

The US Dollar Index retreated from monthly highs and moved back toward the 101.30 zone on Tuesday, after pausing in the 101.60-101.70 area near yearly peaks around 101.80 in late June, according to FXStreet.

FXStreet linked the dollar's correction to easing Middle East tensions that have weighed on crude prices, with WTI breaking below the $80.00 mark and extending its pullback for a third straight day into new two-week lows. The report also pointed to a cooling of inflation worries and a broader corrective move in US Treasury yields.

Ahead of the FOMC meeting on Wednesday, FXStreet said markets are widely expecting the Fed to keep its Fed Funds Target Range at 3.25% to 3.75%, leaving investors focused on the inflation outlook amid a softer-than-expected June CPI print and weaker Conference Board Consumer Confidence data.

With the index trading at 101.29, FXStreet cited technical support from levels above the clustered 55-day, 100-day, and 200-day simple moving averages, while the 14-period RSI at 57.18 remains above the midline and the ADX near 25.64 suggests a modest but ongoing trend. It also flagged upcoming catalysts including the API weekly crude inventory release ahead of Wednesday's official EIA data.

Latest closeWTI crude $81.92 ▼8.3%|Dollar index 101.51 ▲0.0%

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