US Dollar Index Price Forecast: Sticks to gains near 101.35 as bulls await Fed's Warsh

USD Index gains some positive traction amid geopolitical uncertainty and Fed rate-hike bets.
The recent breakout above the 100.50 barrier favors bulls and backs the case for further gains.
Any corrective pullback is likely to find decent support and be bought into near the 100.58 pivot.

Haresh Menghani FXStreet

The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, attracts fresh buyers on Wednesday amid uncertainty over Middle East diplomacy and elevated expectations of US Federal Reserve (Fed) rate hikes. The Index sticks to modest intraday gains around the 101.35 region through the first half of the European session as traders await Fed Chair Kevin Warsh's speech for fresh policy cues and some meaningful impetus.

Looking at the broader picture, the recent breakout through the 100.50 horizontal barrier on the daily chart was seen as a fresh trigger for the US Dollar (USD) bulls. Meanwhile, the Relative Strength Index at 67.38 stays in bullish territory, though it remains close to overbought conditions. However, the positive Moving Average Convergence Divergence (MACD) reading around 0.04 suggests that buyers retain control, even if upside progress could slow as momentum becomes stretched.

DXY daily chart

On the 4-hour chart, the DXY seems to have formed a short-term base around the 101.00 round figure and retains a short-term bullish bias above the 100-period Simple Moving Average (SMA) near 100.59. The latter should act as an immediate pivot for near-term direction. As long as the index defends these levels on a closing basis, dips are likely to be absorbed by buyers, with the path of least resistance pointing to further stabilization and potential grinding gains in the short term.

DXY 4-hour chart

A sustained break back below the pivot, however, would hint at the onset of a corrective pullback within the broader constructive setup as depicted by still-supportive momentum indicators. On the upside, immediate resistance is pegged around the 101.80 zone or the highest since May 2025, touched last week, ahead of the 102.00 mark. Some follow-through buying will reaffirm the bullish outlook and pave the way for an extension of the uptrend from the May swing low, near the 97.62 area.

(The technical analysis of this story was written with the help of an AI tool.)

Economic Indicator

Fed's Chair Warsh speech

Kevin Warsh took office as chairman of the Board of Governors of the Federal Reserve in May 2026, for a four-year term ending in 2030. His term as a member of the Board of Governors will expire in May 2040. Warsh, born in Albany (New York) on April 13, 1970, is an American financier and attorney who already served as a member of the Fed Board of Governors from 2006 to 2011 and was significantly involved in the central bank's response to the financial crisis.

AUD/USD hits nine-week lows below 0.7000 on RBA Bullock's remarks

AUD/USD reverses a brief uptick and turns lower to hit nine-week lows below 0.7000 in the European morning on Tuesday, as traders digest cautious remarks from Reserve Bank of Australia (RBA) Governor Michele Bullock during the press conference. Earlier on, the RBA raised the cash rate to 4.60%, as widely expected, leaving the door open to further rate hikes if needed.

USD/JPY consolidates near 157.50 as a bullish USD counters intervention risks

USD/JPY struggles to capitalize on the overnight bounce from a one-week low, consolidating around 157.50 in the Asian session on Tuesday. Trump's concerns about the Japanese Yen's weakness fueled speculation about another US-Japan joint intervention. This, along with the hawkish BoJ, underpins the JPY and caps the currency pair. Meanwhile, rising Fed rate-hike bets and oil-driven inflation fears continue to push US bond yields to multi-year highs, keeping the US Dollar pinned near a two-month high and supporting the pair.

Gold trims gains; back toward $4,150

Gold now surrenders some of its initial advance and retests the $4,150 zone per troy ounce on Tuesday. Meanwhile, the move higher in the yellow metal comes despite the firmer US Dollar and rising US Treasury yields across the board, while escalating geopolitical tensions appear to limit the downside potential.

Crypto Today: Bitcoin, Ethereum, XRP correct upward amid declining ETF inflows

The cryptocurrency market upholds a neutral-to-bullish bias on Tuesday, with Bitcoin edging closer to a breakout above $84,000. Altcoins mirror BTC’s outlook, with Ethereum holding above $2,700 and Ripple pushing past the reclaimed $1.50 level.

RBA recap: Rate hikes are on the table as demand stays too strong

The Reserve Bank of Australia unanimously tightened monetary policy, warning that inflation remained too high and that several upside risks had begun to materialise. Governor Michele Bullock said the Board would raise rates again if necessary.

Silver is more volatile than Gold ahead of PCE and NFP. This chart shows the positioning gap

The market’s attention is focused on American data this week, but there’s something only those with a trained eye may be looking at: Gold and Silver positioning gap. Financial markets are moving on fears, mostly related to persistently high energy prices driven by the Middle East war. Sure, the US Dollar (USD) is strong, but at what cost?