Dollar Index Near One Week Low
The US Dollar Index (DXY) was around 99.34, near a one-week low, after reaching 100.64 on Tuesday, its highest in 10 months. Attention is on Trump’s address at 01:00 GMT on Thursday, which is set to include an update on Iran. Technically, USD/JPY turned mildly bearish after failing to hold above 160.00, a level previously linked to action by Japanese authorities. Price sat just under the 21-day SMA near 158.80, while the RSI was close to 50 and the MACD was slightly below its signal near zero. A move above the 21-day SMA could bring 160.00 back into view. A firm move below it could shift focus to the 50-day SMA near 156.96. We see the USD/JPY pair hovering near 162.20, with the interest rate gap between the US and Japan being the main driver. Recent US inflation data from March 2026 showed a stubborn 3.1% annual rate, reinforcing the Federal Reserve’s “higher for longer” stance. This environment continues to favor holding dollars over yen.Options Traders Watch Implied Volatility
This situation is reminiscent of the spring of 2025, when we saw the pair test the 160.00 level before pulling back on geopolitical news. At that time, hopes of a US-Iran de-escalation caused a temporary dip in the dollar. Today’s market, however, seems less focused on single events and more on the unyielding economic data. Given the risk of sudden moves, derivative traders should look at rising implied volatility, which has reached an 8-week high. Buying options strategies like straddles could be beneficial, positioning for a sharp breakout regardless of direction. This could be triggered by either a stronger-than-expected US jobs report or surprise action from Japanese authorities. The immediate technical barrier is the 162.50 resistance level, which has held firm this week. A sustained move above this could open the path toward 164.00, a significant multi-decade high. On the downside, the 50-day moving average near 160.10 offers the first major support if we see any official warnings from Tokyo. Create your live VT Markets account and start trading now.
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