The US dollar index (DXY) edged lower in Asian trading on Tuesday, trading around 101.20 . After two consecutive days of gains, some investors opted to take profits while awaiting key US inflation data, leading to a short-term consolidation phase for the dollar. However, against the backdrop of escalating geopolitical risks in the Middle East, the dollar remained supported by safe-haven demand, limiting its pullback. Tensions between the United States and Iran have further escalated. The U.S. Central Command announced a new round of precision strikes against multiple Iranian military targets and stated that more than 50,000 U.S. troops are currently deployed in the Middle East to ensure regional military operations and energy transport security. Meanwhile, Iran's Islamic Revolutionary Guard Corps stated that two supertankers suspected of violating warnings and entering dangerous waterways have lost navigation capabilities in the Strait of Hormuz, and warned relevant countries not to cooperate with U.S. actions, otherwise the resumption of normal navigation in the Strait of Hormuz may be further delayed, and the global energy market will face greater supply risks. The Strait of Hormuz handles approximately 20% of global seaborne crude oil transport . As regional tensions continue to escalate, international oil prices remain strong, and market concerns about energy supply disruptions and a resurgence of global inflation have significantly increased. Rising energy prices not only push up production costs for businesses but may also raise consumer price levels again, thereby affecting the future monetary policy paths of major central banks worldwide. The market generally believes that if energy prices continue to rise, inflationary pressures in the United States may intensify again, increasing the necessity for the Federal Reserve to maintain restrictive monetary policy or even further tighten it. The market's current expectations for Federal Reserve policy are clearly trending towards a hawkish stance, with investors anticipating the possibility of further tightening before the end of the year. This provides fundamental support for the US dollar. On the other hand, investors are closely watching the upcoming release of the US June Consumer Price Index (CPI) data. The market expects the overall US June CPI month-on-month rate to be around -0.1% , while the core CPI month-on-month rate is expected to increase by 0.3% . If core inflation remains high, it will further strengthen expectations that the Fed will maintain a high-interest-rate policy, and the dollar is expected to regain upward momentum. If inflation data is lower than market expectations, it may weaken the dollar's performance and alleviate market concerns about further tightening. Furthermore, Fed Chairman Kevin Warsh will testify before Congress that day, and his remarks on inflation, employment, and the future path of interest rates will be closely watched by the market. If his speech continues to release hawkish signals, it will further solidify the dollar's trend; if the wording is cautious, it may prompt the market to readjust interest rate expectations, and the dollar may face greater volatility in the short term. From a technical perspective, the dollar index maintains a slightly bullish oscillating pattern on the daily chart, with prices trading near major moving averages, and the medium- to long-term trend has not changed significantly. The MACD indicator maintains a golden cross structure, but the red bars have narrowed slightly, indicating a slowdown in upward momentum. The RSI indicator is around 55, suggesting the market remains in a relatively strong zone. If the index regains its footing above 101.50 , it is expected to further challenge the resistance areas of 102.00 and 102.50 . On the downside, key support levels to watch are 100.80 and 100.30 . As long as these key support levels hold, the overall rebound trend is likely to continue. Looking at the 4-hour chart, the US dollar index has entered a short-term consolidation phase at higher levels. The MACD indicator's red bars continue to narrow, indicating a weakening of bullish momentum, but the two lines remain above the zero line. The RSI has fallen back to around 50, reflecting a slight increase in market caution. If the US CPI data is higher than market expectations, and the Fed Chair adopts a hawkish stance, the US dollar index is expected to break through 101.50 and further test 102.00 . If the data is weak, the index may fall back to test the support areas of 100.80 and 100.30 , with significantly increased short-term volatility expected. Editor's Summary: The US dollar index is currently in a consolidation phase ahead of important events. Although there has been a short-term pullback, safe-haven demand stemming from escalating tensions in the Middle East and inflation concerns triggered by rising international oil prices continue to provide strong support for the dollar. The US June CPI data and Federal Reserve Chairman Kevin Warsh's speech will be key factors determining the dollar's next move. If inflation remains resilient, expectations of the Fed maintaining high interest rates will further intensify, and the dollar index is likely to continue its strength. If inflation slows significantly, the dollar may face some downward pressure, and market risk appetite may see a temporary recovery.