- DXY Index has exhibited a bullish bias.
- The financial press anticipated a 0.75% interest hike by Fed Reserve.
- The index will likely maintain an upside in the upcoming months.
The past couple of weeks saw the DXY on a bullish strength. The United States dollar index has climbed to the $105.6 20-year peak as market players wait for Fed’s upcoming decision on interest rates. It has gained more than 17% from 2021’s lowest mark.
U.S Treasuries Continue
DXY Index has maintained impressive upside trends as market participants forecast the highest rate hike by the Fed in decades. Most individuals expect a 0.75% rate surge by the bank as the Fed ends its 2-day financial policy meeting.
Fed will likely resort to a surprise hike due to the latest economic numbers. Bureau Labor Statistics’ data (earlier this month) showed the unemployment rate stayed at 3.6%, with the economy adding more than 390K jobs.
These figures comprised additional ones that indicated the headline consumer inflation data surged to 40-year highs. Meanwhile, inflation increased to 8.6%, exploring higher levels than in the past month. Other figures show the nation’s economy might be ready for recession. For instance, last month’s data showed that pending and new home sales declined sharply.
Moreover, consumer confidence plunged to multi-decade lows amid soaring gas prices. The average gasoline price in the United States had climbed beyond $5 within the past few days. Moreover, the U.S dollar index remained elevated as other global economies struggled with inflation. For instance, the United Kingdom economy stares at stagflation.
Moreover, European Union inflation has surged to explore record highs, despite ECB rate hikes. Also, the Japanese yet, which’s the DXY index’s large part, slumped to record lows.
U.S Dollar Index Prediction
According to the weekly chart, the DXY index has seen massive bullishness within the past couple of months. It has moved beyond the $103.04 and $103.8 crucial resistances, the highest marks in March 2020 & Jan 2017, respectively.
The DXY climbed beyond the 25- and 50-week Moving Averages. Moreover, it has annulled the developing double-top formation. Thus, the index can keep surging, with bulls targeting the crucial resistance at $107.