USD Index Tests 99-101 Zone as Trade Tensions Escalate

The US Dollar Index surged to 99.85, approaching the crucial 99-101 resistance zone as renewed trade tensions sparked risk-averse positioning across forex markets. The dollar's strength materialized across multiple pairs, with particular pressure on emerging market currencies and commodity-linked crosses. Trade policy concerns resurfaced as market participants priced in potential tariff implementations, driving defensive flows into the greenback. Gold futures responded inversely, climbing toward resistance levels as traders hedged against potential trade war escalation. The 99-101 zone represents a significant technical barrier for the dollar index, having acted as resistance multiple times over the past year. A decisive break above 101 could trigger accelerated dollar buying, potentially pushing EUR/USD below 1.0600 and lifting USD/JPY toward 154.00. Immediate support for the DXY sits at 98.50, with momentum indicators suggesting overbought conditions that could prompt near-term consolidation before any sustained breakthrough attempt.