• The US Dollar Index hits a fresh 25-month courtesy of dismal market mood and expectations of an aggressive Federal Reserve tightening cycle.
  • Most Fed officials aligned to hike 50-bps at the May 4-5 meeting.
  • US Dollar Index Price Forecast (DXY): Bull’s target remains the January 2017 highs near 103.82.

The US Dollar Index, a measurement of the greenback’s value against a basket of six currencies, finished with gains of 0.62% and, at the time of writing, is at 101.735, shy of the 2-year high reached during the day at 101.851.

The market mood remains downbeat, as portrayed by Asian equity futures falling. Growing concerns about China’s coronavirus outbreak In Shanghai extended to some Beijing districts, keeping traders on their toes. Fears of wider curbs in Beijing are spooking investors already worried about the risk of a global slowdown as the Fed raises rates to tame inflation.

Additionally, last week’s Fed speaking increased the appetite for the greenback. Money market futures shows that investors have fully priced in a 100% chance of a 0.50% rate hike in the May meeting, while for June, the odds are at 80%, as shown by the CME FedWatch Tool.

In the meantime,  the 10-year US Treasury yield, the benchmark note, retreated from last week’s highs around 2.981%, is down ten basis points, at 2.818%.

Last week’s Fed speaking summary

On Thursday of last week, Fed Chair Jerome Powell blessed a half-point interest rate increase by the May 4-5 reunion. Furthermore, San Francisco Fed President Mary Daly noted that the Fed “will likely” raise rates by 50 bps at a couple of meetings. Daly reiterated that the Fed needs to take a measured pace on rate hikes and get interest rates up to 2.5% by the end of the year.

Elsewhere, St. Louis Fed President James Bullard admitted that the Fed is behind the curve but not as everybody thinks, while adding that the Fed has hiked 75 bps before without the world coming to an end.

Last Friday, Cleveland’s Fed President Loretta Mester commented that she would like to get neutral to 2.5% by the end of the year. When asked about 75-bps increases, Mester added that “we don’t need to go there.” Furthermore, she supported a 50-bps increase in May and a few more after.

The economic calendar for the US would feature March’s Durable Goods Orders, the US Gross Domestic Product for the Q1, and the Core Personal Consumption Expenditure (PCE) for March on annual and monthly readings, alongside the Chicago PMI.

Analysts at ING expect Q1 data to show the US economy expanded at a 1-1.5% annualized rate, which would be below Q4 of 2021 at 6.9%, reflecting the Omicron wave of the pandemic that impacted mobility considerably.

US Dollar Index Price Forecast (DXY): Technical outlook

The US Dollar Index (DXY) retains its upward bias, as depicted by the daily chart. The 50 and the 200-day moving averages (DMAs) at 98.596 and 95.504, respectively, are well located under the DXY value, further cementing the upside bias. The Relative Strength Index (RSI) at 71.24 is in overbought territory, so a deceleration in the DXY trend is on the cards.

The DXY first resistance would be 102.00. A break above would expose March’s 24 daily high at 102.21, followed by March’s 20 2020 daily high at 102.99 and then the aforementioned 103.82 swing high.

Dollar Index Spot

Today last price 101.735
Today Daily Change 0.61
Today Daily Change % 0.60
Today daily open 101.13
Daily SMA20 99.74
Daily SMA50 98.49
Daily SMA100 97.24
Daily SMA200 95.48
Previous Daily High 101.34
Previous Daily Low 100.46
Previous Weekly High 101.34
Previous Weekly Low 99.81
Previous Monthly High 99.41
Previous Monthly Low 96.63
Daily Fibonacci 38.2% 101
Daily Fibonacci 61.8% 100.8
Daily Pivot Point S1 100.61
Daily Pivot Point S2 100.1
Daily Pivot Point S3 99.74
Daily Pivot Point R1 101.49
Daily Pivot Point R2 101.85
Daily Pivot Point R3 102.36



Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content

Recommended content

Editors’ Picks

EUR/USD stays below 1.0850 after US GDP

EUR/USD stays below 1.0850 after US GDP

EUR/USD continues to trade in negative territory below 1.0850 in the European session on Tuesday. The data from the Eurozone showed that the GDP grew at an annual rate of 1.9% in Q4, compared to market expectation of 1.8%, but failed to boost the Euro.


GBP/USD remains pressured toward 1.2300 amid risk aversion

GBP/USD remains pressured toward 1.2300 amid risk aversion

GBP/USD is losing further ground toward 1.2300 in the European trading hours. The renewed uptick in the US Dollar amid risk aversion is weighing down on the pair. Meanwhile, the IMF said that the UK economy is the only G7 nation to shrink in 2023. 


Gold hits one-week low, hangs near $1,900 mark on stronger USD

Gold hits one-week low, hangs near $1,900 mark on stronger USD

Gold price extends its recent retracement slide from the vicinity of the $1,950 level, or a nine-month high touched last week and remains under some selling pressure on Tuesday.

Gold News

Elon Musk mulls over Bitcoin and crypto payments for Twitter in push for regulatory license

Elon Musk mulls over Bitcoin and crypto payments for Twitter in push for regulatory license

Twitter recently started applying for payment licenses in the US. The social media giant’s Twitter Payments division headed by Esther Crawford is working on bringing crypto and fiat payments to the app. 

Read more

Break it or make it week: Fed, earnings, OPEC

Break it or make it week: Fed, earnings, OPEC

Investors have a full plate this week that includes the US Fed's latest policy decision and a slew of big-name corporate earnings. Wall Street widely expects the Fed to deliver a 25bps interest rate hike.

Read more