• The US Dollar Index experienced a drop of 0.33% on Wednesday, following Israeli strikes.
• The dollar has shown a significant recovery this year with a 4.8% increase.
• The USD/JPY pair surpassed its 2023 high, achieving a 2% increase in April.

On Wednesday, the US Dollar Index (DXY) relinquished its early gains, declining 0.33%, amid a flurry of volatility, triggered by news of Israeli strikes on Iranian facilities.

This serves as a vivid reminder of the dollar's vulnerability to geopolitical unrest and shifts in investor sentiment. As tensions in the Middle East appeared to dial down slightly, the dollar's ascent appears to be continuing for now.

The dollar's ascent this year, a solid 4.8% move, signals a comeback from its previous slump, shedding light on the currency's resilience.

The dollar saw a decline of 6.2% between October and December 2023 and now finds itself in a steady range, oscillating between $99 and $107 since December 2022.

The resistance at $107 is close above and could prove a challenge, preventing the dollar from breaking through. If this level is exceeded, targets like the $114 peak from September 2022 could be within reach.

The dynamic between the US Dollar and the Japanese Yen adds another layer to this narrative. April saw the USDJPY pair break above its 2023 high, climbing by 2% for the month to 151.94.

This move, 18 months in the making, could result in a long-term bullish trend unfolding.

After the closing bell on Thursday, April 18, the currency closed at $105.98, trading up by 0.19%.

This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.