US Dollar Index Hits Triangle Resistance at 102.50
The United States Dollar Index may test the upper boundary of the symmetrical triangle around 102.50. The 14-day Relative Strength Index around 58 indicates a consistent upward momentum. The initial support is positioned at the nine-day EMA of 102.01. The US Dollar Index, which measures the value of the US Dollar against six major currencies, is gaining ground for the second successive day and trading near 102.40 during the European hours on Wednesday. The near-term tone remains optimistic as the DXY sustains its position above both the nine- and 50-period Exponential Moving Averages, thereby supporting the short- and medium-term trend.
The 14-day Relative Strength Index around 58 indicates a position in positive but non-extreme territory, implying consistent upside momentum rather than an overextended rally. The technical analysis of the daily chart indicates that the dollar index is remaining within the symmetrical triangle pattern, signalling a period of consolidation before the price breaks out or breaks down. The DXY may test the upper boundary of the symmetrical triangle around 102.50, followed by the 19-month high of 102.94, reached on October 14. On the downside, the US Dollar Index may encounter its primary support at the nine-day EMA of 102.01, succeeded by the 50-day EMA of 101.41 and the lower boundary of the symmetrical triangle near 101.20.
A breach beneath this confluence support zone would instigate a bearish sentiment and exert downward pressure on the dollar index, potentially leading it to traverse the vicinity of a nearly six-month low of 98.56, observed on August 20. Fed’s Goolsbee delivered a notably more hawkish tone, with an FXS Speechtracker score of 8/10 compared to the established baseline of 6.8/10, underscoring rising concern about persistent price pressures. The emphasis that the latest CPI was “borderline disturbing,” that services inflation is “not coming down,” and that there is “a real inflation issue” that the Fed is “going to have to deal with” signals a lower tolerance for upside inflation surprises and keeps the bar high for any near-term policy easing.
References to overheating prices across “a whole bunch of things,” alongside a “steady and stable” job market and the warning that inflation becoming embedded in expectations would be a “major concern,” reinforce a bias toward maintaining or even tightening restrictive policy, a mix that is typically supportive for the Dollar and a headwind for risk-sensitive FX. The FXS Fed Sentiment Index rose by 1.69 points to 145.61, firmly in hawkish territory and consistent with the elevated FXS Speechtracker score. This move higher in the FXS Fed Sentiment Index signals that markets should treat Goolsbee’s remarks as incrementally hawkish for the Fed reaction function, skewing risks toward tighter-for-longer policy expectations.
