DXY Eyes 98.86 BreakoutU.S. Dollar Currency IndexTVC:DXYLeo_WarRoomDXY remains supported in the short term — target 98.67, pullback to 98.57, then a breakout above 98.86 At the moment, the U.S. dollar is still supported by a clear macro backdrop: geopolitical tensions in the Middle East have not been fully resolved, risks around the Strait of Hormuz remain in place, and the market continues to reduce expectations for near-term Fed rate cuts. Reuters reported that the Dollar Index climbed to around 98.58 as investors returned to the USD as a defensive asset, while the market priced a relatively low probability of Fed easing this year. From a macro data perspective, the dollar is also being supported by signs that the U.S. economy remains resilient. Reuters noted that U.S. retail sales came in stronger than expected, reinforcing the view that the economy is still firm enough for the Fed to maintain a cautious stance for longer. That is an important catalyst keeping short-term demand for the dollar intact. From a technical point of view, the chart still shows a valid bullish structure after price formed a higher high and then entered a short corrective phase to absorb supply. My preferred scenario is for price to continue pushing higher toward 98.67, then pull back technically to 98.57 to build a fresh support base. If buying momentum remains in control and the 98.57 zone holds, DXY could resume higher and break above the 98.86 area in the next leg up. In short, this is a setup where macro factors are supporting the USD, while the chart is confirming a bullish continuation scenario after a pullback. As long as 98.57 is not clearly broken to the downside, the short-term bias remains bullish, with upside potential extending above 98.86. Key levels to watch Near-term resistance: 98.67 Pullback support: 98.57 Breakout confirmation: 98.86 Short-term invalidation: a strong break below 98.57 Chart reference