Introduction
The U.S. Dollar Index (DXY) has extended its rally sharply from late-September lows, where price tested a support zone since July. Now hovering near 99.35 after pushing through the R1 pivot at 98.88 and approaching the R2 level at 99.96. The rally is a clean bullish move as price rallied from the support zone, up to just below the R1 pivot, back to the pivot point where it found support and rallied back above R1.
Technical Overview
After weeks of consolidation, DXY surged through the 98.00 pivot level, clearing both short-term resistance and its early-September highs. The bullish move after the support zone was tested has shifted the sentiment more positive, but the 96.2 – 100 range is still intact, and price needs to break above 100 for there to be a solid bullish move.
The RSI has also now moved into bullish territory but not yet overbought.
Momentum confirms the move:
- RSI (14) sits at 65.65, trending strongly upward but not yet at overbought extremes, leaving room for continuation.
Price has cleared above the 50 moving average now after it was sitting sideways since the end of July. The 200 MA is at 101.24, and bulls will be targeting that level, which would be a positive move for a possible new bullish trend to emerge.
Key Technical Levels
| Type | Level | Description |
|---|---|---|
| R2 | 99.96 | Short-term breakout extension target |
| R1 | 98.88 | Pivot resistance, now turning into support |
| S1 | 96.46 | Former support zone |
| Major Resistance | 101.97 | May swing high |
| Major Support | 96.00–96.50 | Multi-month base floor |
Probability Table (Next 2–3 Weeks)
| Scenario | Estimated Probability | Notes |
|---|---|---|
| Continuation toward 100.00–101.00 | 50% | Breakout confirmed with solid momentum and supportive RSI. |
| Sideways consolidation between 98.50–99.50 | 35% | Normal digestion phase after strong multi-day advance. |
| Reversal back toward 97.50 | 15% | Would require a close back under 98.00 to negate the breakout. |
Fundamentals
The dollar is climbing as investors look for safer assets and U.S. economic data stays strong, especially job numbers and services sector reports. With interest rates staying high and inflation not falling much, the Fed’s tough stance is still supporting the dollar.
At the same time, weaker performance from the euro and yen is adding to the dollar’s strength. Unless bond yields drop a lot or market confidence improves, the dollar’s upward trend is likely to continue.
This analysis is for educational and informational purposes only and does not constitute trading advice or a recommendation to buy or sell any futures contracts. Futures trading involves significant risk and may not be suitable for all investors. Always conduct your own research and consult with a licensed financial professional before making trading decisions.
