The U.S. Dollar Index (DXY), which measures the value of the U.S. dollar against a selection of other currencies, has seen an increase following yesterday’s sell-off after a drop in the Consumer Price Index (CPI). This uptick marks a potential fourth-day rise in its weekly trend. In early European trading on Thursday, the index reached a two-week peak, with buyers eagerly awaiting a decisive move past the significant threshold of 100.00 before making further investments.
The CPI report released on Wednesday met market predictions, providing the Federal Reserve with more flexibility to maintain current interest rates. However, traders are still worried about inflationary pressures due to fluctuating oil prices and are anticipating at least one rate hike from the central bank before the year wraps up. Additionally, ongoing tensions between the U.S. and Iran have contributed to a geopolitical risk premium, which supports the demand for the safe-haven U.S. dollar (USD).
Analyzing the technical aspects, this week’s movement past the 50-period simple moving average (SMA) and the 23.6% Fibonacci retracement level from the July-August decline seems to signal a pivotal moment for DXY bullish traders. Moreover, the momentum indicators suggest the possibility for more short-term gains. Currently, the Relative Strength Index (RSI) stands at 58.50, indicating bullish trends without overbought signals, while the Moving Average Convergence Divergence (MACD) remains slightly positive, hinting that buyers are still in control.
That said, waiting for a breakout above the upper limit of the short-term trading range established this month would be a prudent move before pursuing additional profits. Following that, the DXY could potentially advance to the 38.2% Fibonacci level at 100.26, with a 50.0% retracement expected at 100.51, and eventually approaching a significant barrier around the 61.8% level at 100.77. If it can maintain momentum above these levels, the way will be clear for the 78.6% retracement at 101.14 and recent cycle highs close to 101.61.
On the flip side, immediate support can be found at the 23.6% Fibonacci retracement, which is located at 99.94, with the 50-period SMA providing a lower bound at 99.83. A more significant pullback could reveal a structural low in the vicinity of 99.42.
DXY 4 hour chart
USD price this week
The table below illustrates the percentage change of the U.S. dollar (USD) against major currencies this week, with the dollar performing strongest against the New Zealand dollar.
| USD | EUR | GBP | JPY | CAD | Australian Dollar | New Zealand Dollar | Swiss Franc | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.26% | 0.03% | 1.02% | 0.03% | 0.22% | 1.05% | 0.70% | |
| EUR | -0.26% | -0.24% | 0.73% | -0.33% | -0.11% | 0.69% | 0.35% | |
| GBP | -0.03% | 0.24% | 0.92% | -0.09% | 0.13% | 0.93% | 0.56% | |
| JPY | -1.02% | -0.73% | -0.92% | -0.67% | -0.46% | 0.20% | -0.11% | |
| CAD | -0.03% | 0.33% | 0.09% | 0.67% | 0.22% | 0.88% | 0.72% | |
| AUD | -0.22% | 0.11% | -0.13% | 0.46% | -0.22% | 0.80% | 0.42% | |
| NZD | -1.05% | -0.69% | -0.93% | -0.20% | -0.88% | -0.80% | -0.37% | |
| CHF | -0.70% | -0.35% | -0.56% | 0.11% | -0.72% | -0.42% | 0.37% |
The heat map represents the percentage change among major currencies, where the base currency is taken from the left column and the quote currency is selected from the top row. For example, selecting USD from the left and moving horizontally to the Japanese Yen shows the percentage change in that cross rate.
