United States Dollar Index (DXY) Price Forecast: Sticks to gains above 99.00; US PCE eyed

USD Index gains positive traction for the third straight day amid further Mideast escalations.
Hawkish Fed expectations further support the index as bulls now look to important US data.
The bullish technical setup further backs the case for a further near-term appreciating move.

Haresh Menghani FXStreet

The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, attracts some follow-through buying for the third straight day and climbs to a fresh high since April 4, around the 99.54 area on Thursday. The index, however, retreats slightly during the early European session and currently trades around the 99.35 region, still up nearly 0.15% for the day, as bulls turn cautious ahead of the US macro data.

Thursday's US economic docket features the Preliminary Q1 GDP report and the Personal Consumption Expenditures (PCE) Price Index. The latter is considered as the US Federal Reserve's (Fed) preferred inflation gauge and would influence market expectations about the policy path, which, in turn, will provide a fresh impetus to the US Dollar (USD). In the meantime, bets that the Fed will raise borrowing costs by the end of this year and further escalation of tensions in the Middle East continue to act as a tailwind for the safe-haven Greenback.

From a technical perspective, the near-term bias leans bullish as the DXY holds above the 200-period Exponential Moving Average (EMA) on the 4-hour chart, suggesting the broader uptrend remains supported despite recent consolidation. Adding to this, the Moving Average Convergence Divergence (MACD) has turned mildly positive, while the Relative Strength Index (RSI) hovers around 58. This further hints at constructive but not overextended upside momentum and backs the case for a further near-term appreciating move.

On the downside, initial support is seen at the 200-period EMA around 98.81, where a break would weaken the current constructive tone and expose a bigger corrective risk toward prior lows not visible on this chart snapshot. As long as the index defends this underlying demand zone, the technical backdrop favors further recovery attempts toward psychological and prior swing barriers above 99.50, even if short-term pullbacks emerge along the way.

(The technical analysis of this story was written with the help of an AI tool.)

DXY 4-hour chart

Economic Indicator

Personal Consumption Expenditures - Price Index (YoY)

The Personal Consumption Expenditures (PCE), released by the US Bureau of Economic Analysis on a monthly basis, measures the changes in the prices of goods and services purchased by consumers in the United States (US). The YoY reading compares prices in the reference month to a year earlier. Price changes may cause consumers to switch from buying one good to another and the PCE Deflator can account for such substitutions. This makes it the preferred measure of inflation for the Federal Reserve. Generally, a high reading is bullish for the US Dollar (USD), while a low reading is bearish.

AUD/USD rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold extends gains nearing $4,200 as US Dollar struggles

Gold heads north for the second consecutive day, trading near $4,180, with bulls aiming for the $4,230 area, the top of October’s trading range. Precious metals have been boosted by lower US Treasury yields and dovish comments from Federal Reserve officials this week, which have undermined speculative support for the Greenback.

Bitcoin steadies at $82,000: The five forces crushing the Uptober rally

Crypto markets have remained under pressure so far in October, with Bitcoin (BTC) sliding below $80,000 earlier this week before recovering to around $82,000 on Friday, as macroeconomic headwinds and cooling demand weigh on the market.

Week ahead – Stocks seek direction as earnings take centre stage

US equities struggle as risk-off sentiment boosts sovereign bonds. US earnings and midterm elections in the spotlight amidst tech sector weakness. UK jobs and inflation data could challenge current BoE rate hike bets.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.