The US Dollar kicked off the week on a strong note, trending upward as it aligned broadly in the green on Monday. With the US Dollar Index (DXY) briefly surpassing the 105.00 mark, traders now set their sights on upcoming economic indicators, with particular interest in the October inflation data slated for release later this week.

Early Monday saw the DXY inch higher to approximately 105.70, with the Greenback buoyed by the growing possibility of the Republican Party expanding its influence in Congress. Following a decisive victory for President-elect Donald Trump and a Republican-controlled Senate, all eyes are on the ongoing vote count for the House of Representatives, where just four additional seats are needed for a Republican majority.

As the nation observes Veterans Day, the US economic calendar remained quiet, which could contribute to lower market volatility. While stock markets, including strong performances from European equities that rose over 1%, continued trading, bond markets shuttered for the holiday.

The focus shifts toward crucial economic events later this week, including anticipated speeches from several Federal Reserve officials, prominently featuring Fed Chair Jerome Powell, along with the publication of the Consumer Price Index (CPI) data for October on Wednesday. There are speculative talks about potential shifts in monetary policy with the CME FedWatch Tool indicating a 68.5% likelihood of a 25 basis point rate cut in the Fed's December meeting.

In the realm of technical analysis, the DXY’s recent surge following Trump’s electoral victory in a key swing state poses risks of rejection for the rest of the week. Resistance levels appear at 105.53 and 105.89, which are challenging barriers. A breach above these points could lead to targeting 106.52, while further momentum could bring the intense psychological level of 107.00 into play.

On the flip side, should the DXY falter, traders will closely monitor support levels at the round number 104.00 and the 200-day Simple Moving Average (SMA) positioned at 103.86, which may act as a cushion against deeper declines.

As traders prepare for the upcoming data releases, the economic landscape remains dynamic, opening up potential trading strategies amidst both volatility and opportunities. Will the US Dollar reclaim its strength, or will it face a correction? Stay tuned for developments as markets navigate this pivotal week.