United States Dollar Index Price Forecast: DXY consolidates around 99.00 ahead of US CPI
- DXY holds steady within the previous day’s range as trades keenly await the US CPI report.
- Rising September rate hike bets and geopolitical risks act as a tailwind for the Greenback.
- The mixed technical setup warrants some caution before placing aggressive directional bets.
The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, sticks to a mildly positive bias through the early European session, though it remains confined within the previous day's broader range. The index currently trades just above the 99.00 mark as investors keenly await the release of the latest US consumer inflation figures for more cues about the Federal Reserve's (Fed) policy path and to determine the near-term trajectory.
In the meantime, the US Producer Price Index (PPI) report, released on Thursday, pointed to still sticky inflationary pressures, prompting traders to lift their bets for a September rate hike. Furthermore, energy-driven inflation fears, along with persistent geopolitical risks stemming from further escalation of tensions between the US and Iran, continue to act as a tailwind for the safe-haven US Dollar (USD). This favors bulls and backs the case for further gains.
The DXY is capped beneath the 200-period simple moving average (SMA) at 99.12 and a series of higher Fibonacci retracements, which keeps the near-term tone cautious despite a moderately bullish Relative Strength Index (RSI) around 59. That said, a slightly negative and flattening Moving Average Convergence Divergence (MACD) (12, 26, 9) hints that upside momentum is losing traction while the index holds under its 200-period SMA on the 4-hour chart.
Meanwhile, the 38.2% Fibonacci retracement level of the slide from the monthly swing high, at 99.08, is being actively tested as a pivot. This is followed by the next relevant support at the 23.6% Fibo. retracement at 98.89, with a deeper bearish extension exposing the lower structural floor around 98.59. On the topside, initial resistance is located at the 200-period SMA at 99.12, followed by the 50.0% retracement at 99.23 and the 61.8% level at 99.38. Further gains would then face additional barriers at 99.59 and the recent cycle high area near 99.86.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
DXY 4-hour chart
Economic Indicator
Consumer Price Index (YoY)
Inflationary or deflationary tendencies are measured by periodically summing the prices of a basket of representative goods and services and presenting the data as The Consumer Price Index (CPI). CPI data is compiled on a monthly basis and released by the US Department of Labor Statistics. The YoY reading compares the prices of goods in the reference month to the same month a year earlier.The CPI is a key indicator to measure inflation and changes in purchasing trends. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.
Read more.Next release: Fri Sep 11, 2026 12:30
Frequency: Monthly
Consensus: 3.4%
Previous: 3.4%
Source: US Bureau of Labor Statistics
The US Federal Reserve (Fed) has a dual mandate of maintaining price stability and maximum employment. According to such mandate, inflation should be at around 2% YoY and has become the weakest pillar of the central bank’s directive ever since the world suffered a pandemic, which extends to these days. Price pressures keep rising amid supply-chain issues and bottlenecks, with the Consumer Price Index (CPI) hanging at multi-decade highs. The Fed has already taken measures to tame inflation and is expected to maintain an aggressive stance in the foreseeable future.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
