US Dollar Index Price Forecast: DXY declines to 99.75-99.70 amid receding Fed hike bets
- DXY retreats further from a two-week low as signs of cooling inflation temper Fed hike bets.
- Geopolitical risks and inflation risks stemming from higher oil prices could support the USD.
- A break below a two-week-old trading range is needed for the case for further depreciation.
The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, continues to lose ground through the first half of the European session on Friday and retreats further from a two-week high, touched the previous day. The index currently trades around the 99.75 region, down 0.20% for the day, though it seems poised to register modest weekly gains amid mixed cues.
Signs of cooling US inflation forced investors to further scale back their expectations for an immediate interest rate hike by the Federal Reserve (Fed), which, in turn, is seen as a key factor weighing on the US Dollar (USD). However, traders are still pricing in a greater chance that the US central bank will raise borrowing costs by the end of this year amid inflation risks stemming from higher oil prices. This, along with persistent geopolitical uncertainties, could help limit the downside for the safe-haven buck.
From a technical perspective, the recent range-bound price action witnessed over the past two weeks or so might be categorized as a bearish consolidation phase against the backdrop of the decline from the July monthly swing high. Moreover, the overnight failure near the trading range hurdle and the subsequent slide favor DXY bears. Furthermore, momentum indicators reinforce this negative outlook.
In fact, the Relative Strength Index (RSI) is hovering near 40, and the Moving Average Convergence Divergence (MACD) is slipping further below the zero line, hinting at lingering downside pressure on the 4-hour chart. However, it will be prudent to wait for a convincing break below the trading range support near the 99.40 area before positioning for the resumption of the month-to-date declining trend.
On the topside, initial resistance is defined by the 100-period SMA at 100.35, and a sustained break above this barrier would be needed to ease the current bearish bias and open room for a more meaningful recovery. The broader technical setup, however, suggests that rallies are likely to remain shallow while the DXY trades under the said pivotal hurdle.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
DXY 4-hour chart
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.22% | -0.25% | -0.22% | -0.28% | -0.19% | -0.44% | -0.08% | |
| EUR | 0.22% | -0.03% | -0.02% | -0.10% | 0.04% | -0.22% | 0.14% | |
| GBP | 0.25% | 0.03% | 0.04% | -0.06% | 0.06% | -0.17% | 0.18% | |
| JPY | 0.22% | 0.02% | -0.04% | -0.06% | 0.02% | -0.25% | 0.15% | |
| CAD | 0.28% | 0.10% | 0.06% | 0.06% | 0.09% | -0.15% | 0.20% | |
| AUD | 0.19% | -0.04% | -0.06% | -0.02% | -0.09% | -0.25% | 0.11% | |
| NZD | 0.44% | 0.22% | 0.17% | 0.25% | 0.15% | 0.25% | 0.39% | |
| CHF | 0.08% | -0.14% | -0.18% | -0.15% | -0.20% | -0.11% | -0.39% |
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.
