US Dollar Index Price Forecast: Holds gains above 102.00, bullish bias remains intact

The US Dollar Index (DXY) has maintained gains above 102.00 following the Federal Reserve's decision to hold interest rates steady at its October policy meeting. The index currently trades near 102.25 in early European trading hours on Thursday. Traders are awaiting the US September Personal Consumption Expenditures (PCE) inflation report, due on Friday.

The Federal Open Market Committee (FOMC) voted 10-2 to leave the benchmark federal funds rate unchanged in a range of 3.75% to 4%. Fed Chair Kevin Warsh did not provide guidance on future rate hikes during his press conference, which some interpreted as dovish. Analysts at MUFG/BTMU note that Fed Chair Warsh reiterated the Fed's commitment to returning inflation to 2% and highlighted the continued strength of the US economy.

Fed Chair Warsh also pointed out a potential structural shift in the policy calendar, with fewer meetings planned for 2027 and 2028. Market participants price in an 83.3% probability of a December rate hike, according to the CME FedWatch tool. Technical analysis shows that the Dollar Index Spot maintains a bullish near-term bias, holding above both the 100-day simple moving average and the Bollinger Bands' middle line.

The index is approaching the upper boundary of the Bollinger envelope, with the next resistance level at 102.60. A clear daily close above this barrier could lead to further gains towards the March 27, 2025, high of 104.71.