US Dollar Index Price Forecast: Technical setup favours further gains above 100
The US Dollar Index (DXY) climbs to a fresh seven-week high on Friday, supported by the Federal Reserve’s (Fed) hawkish interest rate hike on Wednesday. At the time of writing, the index trades around 100.40 and is on track to register a weekly gain of more than 1%.
The US Dollar Index (DXY) reaches a new seven-week peak on Friday, driven by the Federal Reserve's (Fed) aggressive interest rate increase on Wednesday. Currently trading at 100.40, the index is poised for a weekly increase of more than 1%. US Treasury yields surge sharply, bolstering the Greenback amid high oil prices and worries over energy-related inflation.
The 10-year yield climbs to around 5.00%, nearing the 2007 high of 5.04% observed earlier in the week. UOB Group's analysts revise their forecast, moving from a medium-term bearish USD outlook contingent on a Fed rate pause to the expectation of two additional hikes in December 2026 and Q1 2027. This reassessment suggests that the narrowing of US rate differentials with G-10 peers, which has pressured the DXY since late 2024, is likely to reverse, supporting the DXY moving forward.
However, UOB warns that further policy tightening may occur if inflation remains persistent due to higher energy prices, trade tariffs, and AI-related factors. The USD remains bullish on the daily chart, trading above key moving averages and the 61.8% Fibonacci retracement, with resistance at 100.46 and support at the 50.0% retracement and 50-day SMA.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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