Peace deal may erase the spiking from Fed hawkish holdU.S. Dollar Currency IndexTVC:DXYWiseLeoTradingThe FOMC maintained the interest rate at 3.50%–3.75%, but the forward guidance delivered a hawkish tone, with a majority of officials signaling that they might hike interest rates this year due to the recent broad-based rise in inflation. The swap market now prices in a potential rate hike at the Oct meeting, supporting the US dollar index. Meanwhile, a peace deal finalizing in the coming days might ease concerns over energy prices, which could cool US inflation in the upcoming months and partially offset the hawkish tone from the FOMC. However, inflation might remain sticky as core factors experience price increases, particularly in the housing sector, where the factor rebounded in Mar and might maintain its upward momentum. A robust labor market, characterized by strong NFP prints and a historically low unemployment rate, also triggers strong consumption; this drives high demand and might keep inflation elevated for the foreseeable future. Consequently, fundamental factors may support the DXY even if negotiators reach a peace deal (the index might dampen in the short term, then rebound following upcoming inflation and consumer data releases). Technically, the DXY rose to test the resistance at 100.56, then retraced to test the previous swing high. Expanding EMAs signal a continuing uptrend. If the DXY breaches above the 100.56 resistance, price might continue to rise toward the next resistance at 101.00. Conversely, if the DXY fails to hold above 100.24, price might find support at 99.81. By Van Ha Trinh - Financial Market Strategist at Exness.