The first notable shift comes from the oil market. The phase of extreme stress appears to be behind us, with prices stabilizing without a significant retreat. This setup supports an intermediate scenario: enough inflation to prevent the Fed from pivoting quickly, but not enough to justify further tightening. Consequently, monetary support for the dollar is becoming less obvious.
The bond market confirms this shift. Long-term yields have stopped climbing and are now trading sideways, showing that the market is no longer pricing in a lasting inflationary shock, but rather a moderate slowdown. This stabilization reduces the dollar's relative advantage, particularly against cyclical currencies.
In parallel, US fundamentals remain solid. Consumption is resilient, employment is holding up and activity remains generally upbeat, which limits expectations for aggressive rate cuts. This macroeconomic floor prevents the dollar from depreciating sharply, lthough it is insufficient to reignite a bullish momentum.
Finally, the market is becoming increasingly less sensitive to political noise. Successive announcements regarding the conflict are losing their impact, and only a tangible improvement - notably the full reopening of the Strait of Hormuz - would be likely to durably alter expectations.
Technically, EUR/USD is holding above its key support at 1.1645, although is currently struggling to structure the expected move towards 1.1910/20. Meanwhile, a break below 97.65 on the Dollar Index (DXY) would be required to accentuate the short-term bearish trend.
At the same time, USD/JPY stalled at 160.45 following a bearish key reversal, which keeps the pair under downward pressure as long as 158.10 is not breached. The downside potential stands at 152.75/60. Similarly, USD/CHF remains bearish below 0.7908/45. There is no notable change for AUD/USD, which remains pinned below 0.7200/15 with initial short-term support at 0.7100. The same outlook applies to the Kiwi below 0.5930.
