Dollar Tests Key Resistance Bitcoin Surges to Yearly Highs
The U.S. Dollar Index is currently testing a crucial pivot zone at the August 2024 high and the 2024 low close, situated at 100.26/35. A breakout of the September opening range last week has shifted focus to a late-month high, but the rally requires a close above this key zone to sustain momentum. Initial support lies at 99.80/86, backed by the 38.2% retracement of the June decline and the September opening range high. Broader bullish invalidation is now raised to 99.41/49, the 38.2% retracement of the yearly range and the January high.
Initial resistance is identified at 100.56, the 61.8% retracement and September high. A breach and daily close above this level would signal a resumption of the monthly uptrend, with subsequent resistance objectives at 101.11 and the yearly high-day close at 101.59. The Dollar rally has extended nearly 2% off the monthly low, testing pivotal resistance near 8-week highs. Losses would need to be limited to 99.80 for the upward trend to continue, with a close above 100.56 required to fuel further gains.
The economic calendar this week is relatively light, with PMI data from the Eurozone, UK, and US as the primary event risk. Markets will also monitor developments from Washington, D.C., particularly President Trump’s state visit with Chinese President Xi Jinping on Thursday. Key topics include trade, tariffs, rare-earth supply chains, investment, and AI, all of which could impact the U.S. dollar and broader risk sentiment.
Sterling broke below key support last week, with the decline rebounding off the 61.8% retracement of the June advance at 1.3345 on Friday. Initial resistance is now at 1.3408, with bearish invalidation lowered to 1.3465/74. A break lower exposes the May low at 1.3302 and the 78.6% retracement at 1.3255. GBP/USD has broken below multi-month uptrend support, holding a well-defined channel off the August highs. Rallies would need to be limited to 1.3474 for Sterling to continue its downward trend, with a close below 1.3345 needed to fuel further declines.
Bitcoin broke through the September opening range highs, extending to the highest levels since January. Weekly momentum has reached a twelve-month high, with daily RSI entering overbought conditions near 73. Initial resistance is eyed at the yearly open near 87,496, with the next major technical consideration at 96,942-98,240. Initial support rests at 83,712/916, backed by the May high at 81,447-82,193. The technical outlook remains bullish while above this threshold, with broader bullish invalidation raised to the objective monthly open at 78,571. The focus is on the weekly close with respect to 83,916, with losses needing to be limited to 81,447 for Bitcoin to continue its upward trajectory. A close above 87,496 would fuel the next major leg of the advance.