U.S. Dollar Index bulls await key CPI data to drive breakout above 101.5
DXY Faces Resistance at 101.5
The U.S. Dollar Index extended its recovery on Monday, May 12, building on recent strength to reach a session high of 101.5. The move came after news broke of a 90-day tariff truce between the U.S. and China, temporarily lowering cross-border duties and reducing fears of a drawn-out trade confrontation.
That development spurred risk appetite across financial markets, lifted U.S. Treasury yields, and improved the greenback demand.
The bullish reaction pushed DXY decisively above the 100.0 psychological mark for the first time in weeks. However, Monday’s rally eventually ran into a confluence of technical resistance: a long-term bearish trendline formed since Q1 2025 and the 50-day exponential moving average. Both barriers held, forcing price to retreat slightly and settle into a narrow range between 101.0 and 101.5.
DXY price dynamics (Sept 2024 - May 2025). Source: TradingView
By the European session on Tuesday, May 13, DXY hovered around 101.2, maintaining support at the 101.0 level. The current pullback from Monday’s peak has occurred on slightly rising volume, hinting that sellers are active but not yet dominant. This reflects hesitancy ahead of a key resistance test and potentially market-moving economic data.
Core CPI print may provide the catalyst for DXY's move past EMA and trendline resistance
At the core of market focus is the bearish trendline, which has contained every DXY rebound attempt over the past quarter. A breakout above this level, especially if accompanied by a decisive move above the 50-day EMA, could signal a shift from recovery to sustained uptrend.
Technically, the daily RSI remains in bullish territory, suggesting that upward momentum is intact. This puts the burden on dollar bulls to overcome trend resistance, ideally supported by fresh fundamental drivers.
That driver may arrive shortly in the form of the U.S. Core CPI print for April. The market is expecting a monthly rise of 0.3%, following a 0.1% gain previously. If the actual reading exceeds the forecast, it could fuel expectations of tighter monetary policy, strengthen Treasury yields further, and give the dollar the lift needed to break higher. Until then, the DXY’s short-term direction hangs between strong technical barriers and macroeconomic anticipation.
The DXY rose above 101.0 after the U.S. and China agreed to a 90-day tariff truce. Price broke higher during European hours as improved sentiment boosted dollar demand.
