US Dollar Index Price Forecast: Index tests lower boundary of ascending channel near 101.50

• At 101.98, the nine-day EMA presents the next resistance level the US Dollar Index could test.
• A reading of around 55 on the 14-day Relative Strength Index points to steady momentum without overbought conditions.
• Around 101.70, the ascending channel’s lower boundary provides the nearest support.

Trading around 101.80 in Tuesday’s European session, the US Dollar Index (DXY) is retreating after modest gains. The index tracks the US Dollar (USD) against a basket of six major currencies.

Holding above the 50-day Exponential Moving Average (EMA) gives DXY a mildly positive short-term outlook, although the nine-day EMA is limiting gains as the nearest resistance. Momentum remains steady rather than overbought, with the 14-day Relative Strength Index (RSI) at around 55. Meanwhile, the latest FXS Fed Sentiment Index readings, near 127.51, suggest that broader policy expectations are no longer providing aggressive support, restraining the upside.

On the daily chart, technical analysis also shows the dollar index testing the ascending channel’s lower boundary. A bullish rebound from this trendline support could restore the uptrend, whereas a failure to hold the level would risk a bearish breakdown.

A recovery in the US Dollar Index could bring the nine-day EMA at 101.98, its nearest resistance, into focus. Clearing this short-term moving average would reinforce the bullish bias and support a test of the 18-month high at 102.94, recorded on 14 October. Beyond that lies the ascending wedge’s upper boundary at 103.90.

The first support under test is the ascending channel’s lower boundary, around 101.70, with the 50-day EMA at 100.94 next in line. A deeper fall in the US Dollar Index would leave the five-month low of 98.56, set on 20 August, exposed.

Warsh highlights investment surge and AI while leaving Fed policy dependent on data

At 5.6/10 on the FXS Speechtracker, Fed Chair Warsh’s speech falls slightly below the historical average of 6.1/10. The reading signals caution despite positive remarks about structural growth and a surge in investment. By acknowledging being “over-scarred from the global financial crisis”, Warsh reveals a risk-conscious bias that moderates the hawkish implications of his emphasis on price stability and the forthcoming “crystallizing” meetings in October and December. His attention to AI as a driver of demand and to tail risks for financial stability indicates that the Fed is receptive to structural optimism, but is not prepared to commit in advance to a policy course for the remainder of 2026.

A move of 0.00 points left the FXS Fed Sentiment Index unchanged at a still-elevated 127.51. This suggests that, despite the speech’s slightly softer tone relative to the FXS Speechtracker’s established baseline, the Fed remains firmly hawkish. For markets, the combination of an elevated index reading and guidance that avoids firm commitments suggests that expectations of persistently restrictive policy continue to support the Dollar. Data and AI-related developments will nevertheless be central to the next policy “crystallizing” moments.

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