102.00 area: US Dollar Index maintains positive bias with FOMC meeting in focus

  • A third consecutive day of gains extends DXY's rebound from a three-week low.
  • Rate-hike expectations, firmer US bond yields and geopolitical risks support demand for the safe-haven USD.
  • Ahead of the pivotal two-day FOMC meeting, traders appear reluctant to take aggressive bullish positions.

The US Dollar Index (DXY) is trading around 102.00. Measuring the Greenback against a basket of currencies, the index has drawn buyers for a third consecutive day, extending its rebound from the three-week low reached last Thursday. It reached a near two-week high in Asian trading but has struggled to build on those gains. Traders are staying on the sidelines before the eagerly awaited FOMC policy meeting.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

With the US Federal Reserve (Fed) widely expected to leave interest rates unchanged when it announces its decision on Wednesday, attention will centre on the policy statement and Fed Chair Kevin Warsh's remarks at the subsequent press conference. No updated economic projections are due. Thursday's key US releases, the Advance Q3 GDP and the Personal Consumption Expenditures (PCE) Price Index, will also be scrutinised for signals on the Fed's future policy course. That outlook will be central to the DXY's next directional move.

Traders assign around an 80% probability to another increase in US borrowing costs in December. This pricing persists despite recent signals from Fed officials that there is no urgency to raise interest rates, as markets approach the central bank decision and key data releases.  Inflation concerns linked to elevated energy prices also support expectations of further Fed tightening. US bond yields have edged higher after recently falling to a three-week low. Together with continuing geopolitical uncertainty, that recovery supports the safe-haven Greenback, suggesting the DXY's path of least resistance remains upwards.

4-hour DXY chart

Chart Analysis Dollar Index Spot

200-period SMA Supports Bullish Outlook

Holding above the 200-period Simple Moving Average (SMA) on the 4-hour chart keeps the DXY's bullish bias intact. The break above the 23.6% Fibonacci retracement at 101.92 adds to the positive short-term tone. However, the broader advance is still constrained by the cycle anchor near 102.95, which marks initial resistance.

If the index slips beneath the recently reclaimed 23.6% Fibo. retracement at 101.92, a closely grouped support zone comes into view: the 38.2% retracement at 101.28 and the 200-period SMA at 101.26. A deeper retreat would bring the 50.0% retracement at 100.77 and the 61.8% level at 100.26 into focus. Should the current bullish structure break down, more distant downside targets lie at the 78.6% retracement at 99.52 and the 98.59 area.

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

US Dollar: This Week's Currency Performance

The US Dollar (USD) recorded its strongest performance against the Swiss Franc this week. Its percentage changes against the major currencies listed are set out in the table below.

USD EUR GBP JPY CAD AUD NZD CHF
USD 0.38% 0.20% 0.36% -0.24% 0.14% -0.07% 0.42%
EUR -0.38% -0.21% -0.07% -0.67% -0.31% -0.48% -0.01%
GBP -0.20% 0.21% 0.08% -0.48% -0.10% -0.25% 0.16%
JPY -0.36% 0.07% -0.08% -0.55% -0.28% -0.40% -0.03%
CAD 0.24% 0.67% 0.48% 0.55% 0.31% 0.10% 0.63%
AUD -0.14% 0.31% 0.10% 0.28% -0.31% -0.20% 0.09%
NZD 0.07% 0.48% 0.25% 0.40% -0.10% 0.20% 0.47%
CHF -0.42% 0.01% -0.16% 0.03% -0.63% -0.09% -0.47%

Percentage changes between major currencies are displayed in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. For instance, choosing the US Dollar on the left and following that row across to the Japanese Yen gives the percentage change for USD (base)/JPY (quote) in the intersecting cell.