Fresh risk appetite on US-Iran talks optimism deflates dollar

The dollar fell across the board at the start of the week, pressured by renewed risk sentiment on growing hopes of a deal between the US and Iran to reopen Hormuz strait and prevent deeper crisis on prolonged supply shortage.

Although the dollar opened with gap lower and dipped to 10-day low, the price remains within the near-term congestion ($98.79/$99.45), with top of thinning daily cloud, reinforced by daily Tenkan-sen ($98.80) providing so far sufficient headwinds to limit fresh bears.

Daily studies remain bullish overall, with south-heading indicators still in positive territory that signals potential scenario of consolidation / limited correction before broader bulls regain traction.

The notion is supported by quick changes of narrative about peace talks by President Trump, suggesting that optimism might be short lived and failure to reach a peace deal again would boost persisting uncertainty and provide fresh boost to safe-haven dollar.

On the other hand, lower liquidity on closure of US markets for holiday, contributes to slower and narrower moves on Monday that partially offsets negative impact on the US currency.

In anticipated negative scenario, dollar needs to clearly break below the floor of the recent range ($98.82) to generate initial bearish signal, which will need an extension below pivotal $98.50 zone (daily Kijun-sen / 50% retracement of $97.44/$99.48 upleg / daily cloud base) for confirmation.

Res: 99.04; 99.45; 99.75; 100.00; 100.26
Sup: 98.80; 98.50; 98.21; 97.92