The US Dollar (USD) has maintained its upward trend, surpassing the range of 103.20–103.25 and climbing to its highest level since June 12 on Thursday during the Asian session. The USD Index (DXY), which measures how the USD compares to other currencies, is currently trading just below the mid-103.000 level and is set to continue the sharp upward trend that has been evident over the past month.

The minutes from the July 25–26 FOMC policy meeting showed that although policymakers disagree on the necessity of further rate increases, they are united in their commitment to combating inflation. Another 25 basis point rate increase by the Fed later this year is still a possibility given the US’s robust macroeconomic indicators. The 10-year US government bond yield has increased to its highest level since 2008 as a result of this expectation, which is helping to boost the USD.

The USD’s position as the world reserve currency is also being helped by worries about rising borrowing rates and deteriorating economic circumstances in China. The daily chart’s overbought Relative Strength Index (RSI) is blocking further increases, despite the fact that the overall technical situation favours the possibility of a short-term increase.

A recent breakout above a March-era falling trend-line and a close above the crucial 200-day SMA indicate a bullish trigger. This suggests that the path of least resistance for the USD is still higher. So it appears likely that the price will move in the direction of the 103.75 horizontal resistance before reaching the 104.37 round-figure level.

In contrast, buying interest is anticipated near the 103.500 resistance level, which is established by the falling trend-line and the 200-day SMA, if there is a major corrective decline. The DXY ought to greatly benefit from this. If this level is broken, technical selling may start, which may cause a decline to the 102.80-102.60 support region and then a further slide towards the next important support area near 102.30 and the round number 102.00.

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