USD Bears Retreat as Dollar Index Shows Resilience Near Key Support

The US Dollar Index has stabilized near 104.50, recovering 0.4% from recent lows as dollar bears lose momentum following mixed economic signals. The greenback found support after touching the 200-day moving average at 104.20, prompting short-covering across major pairs. EUR/USD retreated from 1.0920 to 1.0885, while GBP/USD pulled back from 1.3050 to 1.3010 amid profit-taking. Market participants are reassessing Fed rate cut expectations after recent hawkish comments from FOMC members, suggesting rates may remain elevated longer than anticipated. Technical indicators show the DXY forming a potential double bottom pattern, with resistance at 105.20. A sustained break above this level could signal further dollar strength, targeting 106.00. Traders should monitor upcoming US inflation data and Fed speakers for directional cues, as any hawkish surprises could accelerate the dollar's recovery against major counterparts.