DXY Week W29-2026: Core CPI Prints Zero Against a 0.2 Forecast, but US-Iran Escalation Keeps Safe-Haven Demand Alive and the Dollar Refuses to Break
The dollar is caught between two opposing forces this week. On one side, the intensifying US-Iran conflict has driven safe-haven demand, pushing DXY firmer with Brent rallying and Asian currencies weakening broadly. Peace prospects have since surfaced, causing the dollar to tick higher again on uncertainty — classic conflict-driven vol without a clean directional resolution. On the other side, the July CPI print landed at 0.0% MoM against a 0.2% forecast — a meaningful miss — which is structurally USD-bearish and removes near-term Fed hawkishness expectations. Technically, the picture leans bullish: MTF alignment is all-bullish, price is sitting right at the weekly VWAP of 100.77, and the TrendSL at 99.48 remains intact below. A weekly close sustaining above 100.77 keeps short-term momentum with the bulls. The overall bias remains bearish on a 3-week view, but conviction is low — and that honest assessment matters here. The regime reads trending up, the CPI miss is real but hasn't broken structure yet, and the geopolitical safe-haven flow is a wildcard that can reverse fast. Key levels to watch: a sustained hold above 100.77 pressures the bearish thesis. A weekly close below 99.48 would invalidate bullish structure entirely. China's yuan decoupling from the broader safe-haven move in Asia is worth monitoring as a canary for USD directionality. No clear edge here — wait for resolution. -- Intermarket Edge
