US Dollar Index Price Forecast: Heading towards 102.00 as hawkish Fed bets intensify
The US Dollar (USD) outperforms its major currency peers amid growing expectations that the Federal Reserve (Fed) will deliver more than one interest rate hike this year.
As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.17% higher to near 100.93.
According to the CME FedWatch tool, the odds of the Fed delivering at least two interest rate hikes this year is 58.5%, a significant acceleration from 17.1% seen a week ago.
The reasoning behind traders becoming confident about the Fed raising interest rates more than once is a shift observed in the approach of Federal Open Market Committee (FOMC) officials towards the monetary policy market.
The Fed’s Economic Projections released in the monetary policy announcement on Wednesday showed that nine out of 19 policymakers now expect an interest rate hike this year, a sharp turnaround from no officials supporting the need to tighten monetary policy conditions in the prior Economic Projections report released in March.
Going forward, investors will focus on the US preliminary S&P Global PMI data for June and the Personal Consumption Expenditure Price Index (PCE) data for May, which will be released on Tuesday and Thursday, respectively.
US Dollar Index technical analysis
The Dollar Index Spot trades higher at around 100.93 at press time. The near-term bias is bullish as price holds above the 20-day exponential moving average (EMA) at 99.89, suggesting buyers maintain control after the recent advance.
The Relative Strength Index (RSI) at 68.93 hovers just below overbought territory, hinting that upside momentum remains strong but may be approaching a fatigue zone.
On the downside, initial support is aligned with the 20-day EMA near 99.89, where a pullback could find dip-buying interest and keep the broader constructive structure intact. A daily close below this moving average would signal waning bullish pressure and open the door to a deeper correction. The next major support zone would be the June 15 low at 99.38.
Looking up, the spot could extend the advance towards the one-year high around 102.00 if it manages to rise above the June 19 high at 101.13.
(The technical analysis of this story was written with the help of an AI tool.)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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