US Dollar Index Price Forecast: DXY bulls await trading range breakout above 100.00
- DXY gains positive traction for the fourth straight day and seems poised to appreciate further.
- Oil-driven inflation fears fuel Fed hike bets and underpin the USD amid the US-Iran standoff.
- A move above a short-term trading range barrier is needed to reinforce the bullish outlook.
The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, is seen building on the previous day's sold bounce from the post-CPI swing low and prolonging its weekly uptrend for the fourth straight day. The momentum lifts the Index to a two-week high during the early part of the European session on Thursday, with bulls still awaiting a sustained move beyond the 100.00 psychological mark before positioning for further gains.
The US Consumer Price Index (CPI) report, released on Wednesday, came in line with market expectations, giving the Federal Reserve (Fed) more room to hold interest rates steady. Traders, however, remain worried about inflation risks stemming from volatile oil prices and are still pricing in a greater chance that the US central bank will raise borrowing costs at least once by the end of this year. Apart from this, the US-Iran standoff keeps the geopolitical risk premium in play and acts as a tailwind for the safe-haven US Dollar (USD).
From a technical perspective, this week's move beyond the 50-period Simple Moving Average (SMA) and the 23.6% Fibonacci retracement level of the July-August decline were seen as key triggers for DXY bulls. Adding to this, supportive momentum indicators back the case for a further near-term appreciating move. In fact, the Relative Strength Index (RSI) at 58.50 leans bullish without overbought signals, while the Moving Average Convergence Divergence (MACD) remains slightly positive, hinting that buyers retain control.
However, it will still be prudent to wait for a breakout through the top boundary of a short-term trading range held since the beginning of this month before positioning for any further gains. The DXY might then climb to the 38.2% Fibo. retracement at 100.26, en route to the 50.0% retracement at 100.51 and the denser barrier around the 61.8% level at 100.77. A sustained break above these would open the way toward the 78.6% retracement at 101.14 and the recent cycle high around 101.61.
On the downside, immediate support is seen at the 23.6% Fibo. retracement at 99.94, with the 50-period SMA at 99.83 reinforcing that floor. A deeper pullback would expose the structural low around 99.42.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
DXY 4-hour chart
US Dollar Price This week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.26% | 0.03% | 1.02% | 0.03% | 0.22% | 1.05% | 0.70% | |
| EUR | -0.26% | -0.24% | 0.73% | -0.33% | -0.11% | 0.69% | 0.35% | |
| GBP | -0.03% | 0.24% | 0.92% | -0.09% | 0.13% | 0.93% | 0.56% | |
| JPY | -1.02% | -0.73% | -0.92% | -0.67% | -0.46% | 0.20% | -0.11% | |
| CAD | -0.03% | 0.33% | 0.09% | 0.67% | 0.22% | 0.88% | 0.72% | |
| AUD | -0.22% | 0.11% | -0.13% | 0.46% | -0.22% | 0.80% | 0.42% | |
| NZD | -1.05% | -0.69% | -0.93% | -0.20% | -0.88% | -0.80% | -0.37% | |
| CHF | -0.70% | -0.35% | -0.56% | 0.11% | -0.72% | -0.42% | 0.37% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
