DXY: Bias to sell rallies – OCBC

US Dollar (USD) fell broadly against most currencies. DXY was last at 99.59, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Downside risks are seen

"Safe haven including CHF, JPY and gold strengthened more at first in reaction to a CNN report that new intelligence suggests Israel is preparing possible strike on Iranian facilities. But as the session continued, other FX in the region (including THB, MYR, KRW) played catch-up on gains."

"We reiterate that Moody’s downgrade comes as a timely reminder that a rise in budget deficit in the absence of fiscal discipline and heightened policy uncertainty (owing to Trump tariffs) is not sustainable and further question USD’s status as a safe haven and primary reserve currency. As doubts over USD continue to grow, a continuation of diversification flows out of US assets, including the USD, as well as more proactive hedging (to reduce USD exposure) can weigh on USD over time, while other currencies benefit."

"The thematic of sell USD on rally may persist for longer. Bullish momentum on daily chart is fading while RSI fell. Downside risks are seen. Support at 99.10 levels. Resistance at here at 100.10 (21 DMA), 100.80 (23.6% fibo retracement of 2025 peak to trough) and 101.40 (50 DMA)."