The US Dollar trades steady on Monday following a weekend without escalation in the Israel-Iran conflict, boosting risk sentiment and easing safe-haven demand.

Key Factors:

• Geopolitical Relief: The de-escalation of tensions supports risk appetite, potentially limiting USD gains.
• Thin Economic Calendar: Ahead of Thursday’s US GDP and Friday’s crucial PCE data, the economic calendar remains light, encouraging profit-taking on USD positions.
• PCE Focus: The Federal Reserve’s favored inflation gauge, PCE could significantly impact USD direction. A hot reading could reignite rate hike expectations before the Fed considers any cuts.

Technical Analysis:

• Selling the Peak? Traders are positioning themselves for a potential USD pullback towards the 104.00-105.00 area seen in early 2023.
• Key Resistance: The recent high at 106.52 remains a critical upside barrier. Further resistance lies at 107.00 and the October 3 high at 107.35.
• Crucial Support: Initial support lies at 105.88 (pivotal level), followed by 105.12 and 104.60. The region containing the 55-day and 200-day SMAs (104.17 and 103.91) offers additional support.
• Bond Yields: Keep an eye on US Treasury yields as they heavily influence the USD’s direction.