DXY 8-Month Range — Corrective Bounce Toward Resistance Cluster
DXY Resistance
97.9 – 98.4
200D SMA cluster. Must clear to invalidate bearish structure.
DXY Support
96.5 – 96.9
Q1 lows. Break below reopens the move toward 95.
EUR/USD Support
1.1750
Post-SCOTUS whipsaw base. Holding.
Gold Resistance
5,200 – 5,250
ATH approach zone. Above → new high potential.
CFTC Net USD Positioning — 5-Year Bearish Extreme
XAU/USD — Absorbing Dollar Strength, Structural Bid Intact
DXY is testing the upper bound of its eight-month range, climbing to 97.9 on Tuesday as the new Section 122 tariffs took effect at midnight and Trump signaled a further increase to 15%. EUR/USD eased to 1.177, consolidating after last week's post-SCOTUS whipsaw. Gold pulled back to 5,148 after touching three-week highs above 5,230 earlier in the session — the bid is structural, not speculative, and the metal is absorbing dollar strength without breaking lower. USD/JPY surged to 155.9, touching 156.3 intraday, after reports that PM Takaichi pressed BOJ Governor Ueda on the pace of rate hikes, temporarily removing the April hike bid that had supported the yen.
The 97.9–98.4 zone — the 200-day SMA cluster — is the level that defines whether this is a dead-cat bounce or something more consequential. CFTC positioning remains at five-year bearish extremes on USD at −$22.8 billion, which means a squeeze is mechanically possible but requires a genuine data catalyst. Friday's tariff ruling was the structural confirmation. The Section 122 replacement is weaker, time-limited, and legally constrained. This week's price action is noise from repositioning and thin post-ruling liquidity, not a regime shift.
Q2 Thesis Status: Unchanged
The Q2 thesis — structurally bearish USD, long gold, long EUR on dips — has not changed. The SCOTUS ruling was the structural confirmation, not the challenge.
Key Watch
Friday: January PPI (8:30 AM EST) — Following last week's 3.0% core PCE print, Friday's Producer Price Index is the critical heat check for tariff-induced inflation pass-through. A final demand print above 3.2% solidifies the hawkish pause narrative for the March FOMC and gives the dollar correction room to test the 98.4 resistance cluster. Secondary watch: tonight's State of the Union for tariff rhetoric, and Thursday's US-Iran talks.
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