US Dollar Index Price Forecast: DXY eyes 99.80 confluence hurdle as focus remains on Fed
- DXY attracts buyers for the fourth straight day amid Fed rate hike bets and Middle East jitters.
- Inflation risks remain supportive of elevated US bond yields, further underpinning the Greenback.
- The bullish technical setup backs the case for an extension of a one-week-old upward trajectory.
The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, maintains a positive bias for the fourth straight day on Tuesday and climbs back closer to a nearly two-week high, which it touched the previous day. The index trades around the 99.65 region during the early European session, up over 0.15% for the day, as the focus remains firmly on a two-day FOMC policy meeting, starting later today.
Heading into the key central bank event, investors have been pricing in a greater chance that the US Federal Reserve (Fed) will raise interest rates on Wednesday. Apart from this, oil-driven inflation fears remain supportive of elevated US bond yields and continue to act as a tailwind for the DXY. Furthermore, persistent geopolitical uncertainties amid intensifying US-Iran tensions and clashes in the Strait of Hormuz underpin the safe-haven US Dollar (USD).
US yields climb as Danske Bank turns more hawkish on Fed path
Analysts at Danske Bank report that "US yields have continued to push higher, with the 10Y trading above the 5% threshold," as markets reassess the policy outlook. In this context, the bank notes that "in the US, we revised our Fed call such that we now expect a hike of 25bp on Wednesday meeting." Danske Bank adds that it "maintain[s] our forecast for 25bp increases at both the December and March meetings, taking the Fed Funds rate to 4.25-4.50% towards the end of 2027 (prior: 4.00-4.25%)," underscoring a more hawkish trajectory than previously anticipated.
From a technical perspective, the DXY is approaching the 99.80 confluence – comprising the 38.2% Fibonacci retracement level of the July-August downswing and the 100-day Simple Moving Average (SMA). Any further move up could still face some selling near this zone, which, if cleared decisively, will set the stage for additional near-term gains. Meanwhile, momentum indicators on the daily chart back the case for an eventual breakout through the said barrier.
The Moving Average Convergence Divergence (MACD) histogram has turned modestly positive, and the Relative Strength Index (RSI) at about 54 hints at improving momentum. Hence, the subsequent move up could lift the DXY further to the 50.0% level near 100.14 and the 61.8% retracement at 100.50, ahead of a stronger barrier at 101.02 and 101.68. On the downside, initial support is seen at the 23.6% Fibo. retracement near 99.33, with a deeper floor around 98.60.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
DXY daily chart
US Dollar Price Last 7 Days
The table below shows the percentage change of US Dollar (USD) against listed major currencies last 7 days. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.76% | 0.46% | 0.31% | 0.63% | 1.33% | 2.04% | 0.96% | |
| EUR | -0.76% | -0.26% | -0.45% | -0.11% | 0.62% | 1.27% | 0.22% | |
| GBP | -0.46% | 0.26% | -0.21% | 0.16% | 0.87% | 1.62% | 0.48% | |
| JPY | -0.31% | 0.45% | 0.21% | 0.35% | 1.04% | 1.66% | 0.68% | |
| CAD | -0.63% | 0.11% | -0.16% | -0.35% | 0.71% | 1.28% | 0.33% | |
| AUD | -1.33% | -0.62% | -0.87% | -1.04% | -0.71% | 0.71% | -0.38% | |
| NZD | -2.04% | -1.27% | -1.62% | -1.66% | -1.28% | -0.71% | -1.12% | |
| CHF | -0.96% | -0.22% | -0.48% | -0.68% | -0.33% | 0.38% | 1.12% |
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.
