Dollar stalls as ceasefire talks stall; oil lifts DXY

The US dollar stalled after a 2.5% correction as traders awaited ceasefire talks expected in Islamabad in mid‑April. A pickup in WTI crude provided support to the Dollar Index (DXY), leaving markets without a clear directional driver.

Talks due to start in Islamabad produced no decisive headlines, prompting traders to hold back from larger positions. U.S. officials pressed for an agreement, and commentator Pete Hegseth warned the U.S. would ‘restart combat if Iran doesn't agree to a deal.' Two of the three major U.S. equity indexes traded near record levels, and the Nasdaq hit an overnight high.

Since early April WTI crude and the Dollar Index have shown a pronounced correlation. WTI’s rebound coincided with a pause in the dollar’s earlier retreat, and market participants noted that tracking oil flows became an important input for FX positioning while diplomatic clarity remained pending.

On technical charts the DXY remained confined to a wide 95.50 to 100.00 range. The index paused near the range midpoint after its correction. A four‑hour chart showed an early bullish divergence. Traders identified a war pivot zone at 98.50–98.70 and the four‑hour 50‑period moving average near 98.80 as potential re‑entry points. Additional resistance was seen at 99.40–99.50 and between 100.00 and 100.50, with prior highs near 100.544. Immediate support stood near 98.00, followed by 97.40–97.60, then 96.50–97.00 and just below 96.00.

Major currency pairs were monitored for spillover from DXY moves. Pullbacks in GBP/USD, USD/CAD and USD/JPY were viewed by traders as possible setups to position for a dollar rebound if crude remained bid. Equities held gains despite commodity volatility, and many participants reduced large directional bets while ceasefire negotiations and oil price direction remained unresolved.

The recent strengthening of the oil‑dollar link followed an escalation in regional tensions and stepped‑up international mediation. Investors reacted to geopolitical headlines and oil supply signals, and those developments often translated quickly into currency movements.