US Dollar Index Price Forecast: Can It Test the Symmetrical Triangle Top at 102.50?

• Further upside in the United States Dollar Index could bring the symmetrical triangle’s upper boundary near 102.50 into focus.
• Steady upward momentum is indicated by the 14-day Relative Strength Index, which stands around 58.
• At 102.01, the nine-day EMA offers the first support level.

Gains are extending for a second consecutive day in the US Dollar Index (DXY), with the gauge trading around 102.40 in Wednesday’s European session. The index tracks the US Dollar (USD) against a basket of six major currencies.

A bullish near-term outlook continues to prevail, with the DXY trading above its nine- and 50-period Exponential Moving Averages (EMAs). These levels support the short- and medium-term trend. Meanwhile, a reading of around 58 on the 14-day Relative Strength Index (RSI) points to sustained upward momentum: the indicator is in positive territory but remains short of extreme levels, rather than signalling an overstretched rally.

On the daily chart, technical analysis shows the dollar index still trading inside a symmetrical triangle. The pattern points to consolidation ahead of a possible breakout to the upside or downside.

Near 102.50, the symmetrical triangle’s upper boundary could be tested by the DXY. Beyond that lies 102.94, the 19-month high recorded on 14 October.

Initial downside support for the US Dollar Index could emerge at 102.01, the nine-day EMA. Further support lies at the 50-day EMA of 101.41 and near 101.20, where the symmetrical triangle’s lower boundary sits. A breach of this support confluence would shift the bias to bearish and place the dollar index under downward pressure towards the area around 98.56, the nearly six-month low registered on 20 August.

How Does Goolsbee’s ‘real inflation issue’ Warning Strengthen the Hawkish Fed Tone and Support the Dollar?

A distinctly more hawkish message from the Fed’s Goolsbee pushed his FXS Speechtracker score to 8/10 against an established baseline of 6.8/10, highlighting growing unease over persistent price pressures. His description of the latest CPI as “borderline disturbing,” together with his comments that services inflation is “not coming down,” points to reduced tolerance for upside inflation surprises. By stressing that there is “a real inflation issue” the Fed is “going to have to deal with”, he also set a high threshold for any near-term policy easing. Goolsbee referred to overheating prices across “a whole bunch of things” while describing the job market as “steady and stable”. His warning that inflation becoming entrenched in expectations would be a “major concern” further supports a preference for retaining, or even tightening, restrictive policy. Such a combination typically favours the Dollar while weighing on risk-sensitive FX.

An increase of 1.69 points took the FXS Fed Sentiment Index to 145.61, leaving it firmly hawkish and in line with the higher FXS Speechtracker score. The rise suggests that markets should view Goolsbee’s comments as an incremental hawkish shift in the Fed’s reaction function, tilting risks towards expectations that policy will remain tighter for longer.

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