19 Feb 2025

The DXY has surpassed the 107.00 mark in light of escalating geopolitical tensions. Russia has expressed no interest in a meeting between Trump and Putin, as key demands remain unaddressed. The Empire State Manufacturing Index has unexpectedly returned to positive figures. On Tuesday, the US Dollar Index (DXY), which measures the performance of the US Dollar (USD) against six major currencies, experienced an increase as traders responded to negative developments from the US-Russia discussions in Riyadh. Despite attempts to broker a ceasefire or peace agreement regarding Ukraine, Russia has indicated that a Trump-Putin meeting is unnecessary this month due to unresolved issues. As of the current moment, the DXY is positioned above 107.00, driven by geopolitical uncertainties.

The US Dollar strengthens as Russia dismisses the prospect of a Trump-Putin meeting.

Geopolitical uncertainties bolster the US Dollar, particularly as discussions between the US and Russia in Riyadh yield no advancements. Russia has indicated that a meeting between Trump and Putin is unwarranted due to outstanding demands, diminishing previous hopes for a potential ceasefire.

On the Ukrainian front, President Volodymyr Zelensky emphasized that "fair" negotiations to resolve the conflict with Russia must include Ukraine and Europe, further contributing to a negative market sentiment.

In terms of economic data, the New York Empire State Manufacturing Index for February has rebounded into positive territory after several months of decline, yet this development had minimal effect on the USD.

Federal Reserve officials are still evaluating the implications of maintaining steady interest rates and are adopting a cautious approach. Notably, the Fed’s sentiment index on the daily chart remains entrenched in hawkish territory.

DXY technical outlook: Significant resistance at 107.50, yet downside risks continue

The US Dollar Index faces challenges in maintaining its gains after recovering the 107.00 mark. Although there has been a slight rebound, the 20-day Simple Moving Average (SMA) continues to act as a critical resistance level following its breach last week. The Relative Strength Index (RSI) remains firmly in negative territory, and the Moving Average Convergence Divergence (MACD) indicates persistent bearish momentum. Immediate support is identified at the 100-day SMA, positioned at 106.30; a decline below this threshold could validate a short-term bearish perspective. For bulls to effectively contest the 107.50 level, a stronger momentum is essential.