
Buying interest remains intact in the US Dollar Index (DXY) for a third consecutive day, although caution ahead of the keenly awaited FOMC policy meeting is limiting further gains. The index, which measures the Greenback against a basket of currencies, is extending its rebound from the three-week low reached last Thursday. After hitting a nearly two-week high in the Asian session, DXY has struggled to build on the move and is now trading around 102.00 as traders step aside before the policy decision.

With the US Federal Reserve (Fed) widely expected to leave interest rates unchanged when it announces its decision on Wednesday, attention will centre on the accompanying policy statement and Fed Chair Kevin Warsh's remarks at the post-meeting press conference. No updated economic projections will be available. Thursday's key US macroeconomic releases, the Advance Q3 GDP and the Personal Consumption Expenditures (PCE) Price Index, will also be scrutinised for indications of the Fed's future policy course. That outlook will be a major factor in shaping DXY's next directional move.
As markets approach the central bank decision and key data releases, recent comments from Fed officials have indicated that there is no immediate need to raise interest rates. Nevertheless, traders continue to assign around an 80% probability to another increase in US borrowing costs in December. Inflation concerns linked to high energy prices also support expectations of additional Fed tightening. Meanwhile, US bond yields have edged higher after recently falling to a three-week low. Together with continuing geopolitical uncertainty, this provides support for the safe-haven Greenback, suggesting that DXY's path of least resistance remains upwards.
Trading above the 200-period Simple Moving Average (SMA) on the 4-hour chart keeps DXY's technical bias bullish. A break above the 23.6% Fibonacci retracement at 101.92 adds to the positive near-term outlook. However, the broader rise is still constrained by the cycle anchor level near 102.95, which marks the first resistance.
Should DXY slip back below the recently regained 23.6% Fibo. retracement at 101.92, support could emerge in the closely aligned zone comprising the 38.2% retracement at 101.28 and the 200-period SMA at 101.26. A more pronounced retreat would bring the 50.0% retracement at 100.77 and the 61.8% level at 100.26 into view. If the current bullish structure breaks down, the 78.6% retracement at 99.52 and the 98.59 area would become more distant downside targets.
(An AI tool assisted in preparing the technical analysis for this article. Learn more.)
The US Dollar's strongest performance this week was against the Swiss Franc. The table below sets out the percentage changes in the US Dollar (USD) against the major currencies listed.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.38% | 0.20% | 0.36% | -0.24% | 0.14% | -0.07% | 0.42% | |
| EUR | -0.38% | -0.21% | -0.07% | -0.67% | -0.31% | -0.48% | -0.01% | |
| GBP | -0.20% | 0.21% | 0.08% | -0.48% | -0.10% | -0.25% | 0.16% | |
| JPY | -0.36% | 0.07% | -0.08% | -0.55% | -0.28% | -0.40% | -0.03% | |
| CAD | 0.24% | 0.67% | 0.48% | 0.55% | 0.31% | 0.10% | 0.63% | |
| AUD | -0.14% | 0.31% | 0.10% | 0.28% | -0.31% | -0.20% | 0.09% | |
| NZD | 0.07% | 0.48% | 0.25% | 0.40% | -0.10% | 0.20% | 0.47% | |
| CHF | -0.42% | 0.01% | -0.16% | 0.03% | -0.63% | -0.09% | -0.47% |
To read the heat map, select the base currency from the left-hand column and the quote currency from the top row. Each cell shows the percentage change between the corresponding major currencies. For instance, selecting the US Dollar on the left and following its row across to the Japanese Yen gives the percentage change for USD (base)/JPY (quote).