The US Dollar (USD) is holding steady near a 5-day high, but its movement is limited. The DXY index is hovering around 99, according to analysts at OCBC. Geopolitical tensions are impacting risk sentiment. The US is considering restrictions on exports to China that involve US software, while Ukraine has been cleared to use long-range missiles.

USD Resistance and Support Levels

The US Treasury Secretary has mentioned upcoming sanctions on Russia. Additionally, a dip in precious metals is affecting market sentiment. In the short term, the DXY may stay near its higher range, indicating a slight bullish trend. Key resistance levels for the DXY are at 99.10, 99.80, and 100.80, while support levels are at 98.40, 98, and 97.60. These export restrictions and geopolitical tensions are also affecting EUR/USD, GBP/USD, and precious metals, along with GBP/JPY due to yen weakness. Upcoming events include the US Consumer Price Index (CPI) release this Friday and the Swiss National Bank’s meeting minutes, which may provide minor insights into the negative rate debate. Right now, the US Dollar appears strong but lacks a clear reason to rise above its current range. We advise considering trades in both directions over the next few weeks, as the DXY seems stable around 99.00. This uncertainty creates opportunities for traders who are not focused solely on one direction. We can see the effects of geopolitical tensions in the market’s fear gauge, with the VIX index rising from 15 to over 19 in October 2025. This increase in uncertainty supports the dollar as a safe-haven asset. However, recent data shows a 3% slowdown in US export growth for Q3, suggesting that the strong dollar might be creating challenges for some sectors.

Market Reactions and Strategies

Given the current price movement, it makes sense to engage in derivative strategies that profit while the dollar stays within a specific range. Strategies such as selling strangles on USD futures could be effective, particularly below the key support level at 98.40 and near the resistance level around 99.80. This allows us to collect premium while waiting for a more significant market shift. The upcoming Consumer Price Index (CPI) release is the main event that could change the current trend. We remember how inflation shocks in 2022-2023 caused major market fluctuations, and the market is sensitive to any signs of ongoing price pressure. If inflation numbers come in higher than expected, it’s likely the dollar will push towards the 100.80 level. Additionally, the recent decline in precious metals, with gold falling back toward $2,200 an ounce despite global tensions, suggests the market is prioritizing the dollar’s yield over traditional safe havens. This reinforces the idea that hawkish inflation data could further strengthen the dollar at the expense of other assets. Create your live VT Markets account and start trading now.

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