US Dollar Index Price Forecast: Needs a decisive move above 100.56 for fresh upside leg

The US Dollar (USD) holds onto previous day’s gains on Tuesday, with the US Dollar Index (DXY) trading firmly around 100.40.

The United States (US) currency is expected to remain on the sidelines as financial markets await the outcome of the meeting between President Donald Trump and leaders from Gulf nations, especially Iran, regarding the normalization of energy supply through the Middle East.

This week, investors will also focus on meeting between Chinese leader Xi Jinping and US President Trump, which is expected in the

This week, investors will also focus on meeting between Chinese leader Xi Jinping and US President Trump, which is expected in the September 23-25 period. Both leaders are expected to discuss various issues regarding Artificial Intelligence (AI) and critical minerals.

On the monetary policy front, the Federal Reserve (Fed) is almost certain to deliver one more interest rate hike this year, in an attempt to extend pressure on high inflation. Latest comments from Fed officials have signaled that high inflation is a key concern for them and is not driven by just elevated oil prices.

On Monday, Chicago Federal Reserve (Fed) Bank President Austan Goolsbee said in an event that not just energy, strong demand, tariffs, and other supply shocks may be adding to inflation too.

US Dollar Index Technical Analysis

Bias: In the daily chart, the Dollar Index Spot trades at 100.40. The near-term bias is bullish as price holds above the 20-day exponential moving average (EMA) at 99.71, reinforcing a constructive short-term trend after reclaiming the 100.00 handle.

Momentum: The Relative Strength Index (RSI) at 63.49 sits in positive territory, hinting at firm upside momentum but not yet at overbought extremes.

Support: On the downside, initial support is provided by the 20-day EMA at 99.71, which underpins the advance and would need to give way to signal a deeper corrective phase.

Resistance: On the upside, the DXY needs to break decisively above the Friday high at 100.56 to extend the rally towards 101.00.