Dollar Index, S&P 500 Test Defining Levels for H2 2026 Amid Geopolitics and Fed Expectations
Market activity is intensifying as several major assets approach critical technical levels. This comes on the heels of geopolitics and shifting Federal Reserve expectations, which are driving risk sentiment.
The US Dollar Index (DXY) has pulled back toward rising support near 99.30, a key level defining its bullish 2026 structure. Despite this decline, several technical factors continue to support the broader 2026 bullish structure, including an ascending trendline and daily momentum in oversold territory.
The S&P 500 is testing the 7,790-7,800 resistance region, aligning with the 138.2% Fibonacci extension of the June-July cycle. A sustained breakout above this zone would expose the 161.8% Fibonacci extension near 7,880.
This week's US CPI report could prove decisive in determining whether the second half of 2026 begins with another extension of the risk-on trend or a broader corrective phase.