Dollar Holds Near 99.5 as Talks Stall; EUR/USD Slides

The U.S. dollar strengthened on Tuesday even as negotiators agreed to reopen the Strait of Hormuz and pursue a longer-term peace process. Equities opened higher on easing geopolitical concerns, while currency and commodity markets remained cautious because key diplomatic issues are unresolved.

Diplomats agreed to reopen the Strait of Hormuz within 30 days and to work toward a peace framework over the next 60 days. Negotiators remain deadlocked over the release of frozen funds and the disposition of Iran’s enriched nuclear stockpiles. Those outstanding issues supported demand for the dollar and lifted crude oil prices, with Brent posting a notable rebound on the prospect of renewed shipping access.

The Dollar Index was consolidating in a higher range than recent weeks, trading between about 99.00 and 99.50. Shorter-term momentum has turned firmer, with the index above the four-hour 50-period moving average and the RSI rising, pointing to a possible test of the 99.50 area. Near-term resistance sits around 99.40–99.50, with an earlier war-related spike near 99.68 and a larger resistance band between 100.00 and 100.50. Support levels include the intraday pivot near 99.00, a 98.50–98.70 zone and deeper supports in the 97.40–97.60 and 96.40–96.80 ranges.

EUR/USD showed downside pressure, rejecting its four-hour 50-period moving average while momentum indicators turned bearish. The pair was headed toward the lower bound of its longer-term bear channel near 1.1580. A close above roughly 1.1660 would negate the current bear setup. Traders were watching a nearby pivot around 1.1635–1.1655, resistance toward 1.17–1.18 and lower supports at 1.1540–1.1580 and 1.1475–1.1500.

GBP/USD rallied earlier but stalled at its four-hour 200-period moving average near 1.35 and retraced to a pivot zone. The pound’s path appeared mixed: a failure to clear the 200-period moving average could form a double-top, while a break below about 1.3420, near the 50-period moving average, would likely put pressure on the pair. Key support clusters ran from roughly 1.3280–1.3310 down toward 1.32, with resistance points above 1.36.

Market analyst Elior Manier observed, “Even though hopes for peace are pushing risk assets to new highs, the US Dollar remains strong, going against the general trend.” He pointed to ongoing geopolitical uncertainty and inflation concerns as factors keeping demand for the greenback elevated.

Traders said they will monitor further diplomatic developments, scheduled economic data and central bank communications for signals on whether the dollar’s recent strength will continue or reverse.