Dollar Index Analysis

• 19 March, 2024 Ruchit Thakur

Dollar Index Analysis

Evening Update: Will the Dollar Index (DXY) continue to rise or fall after reaching 102.00?

Last month, the Dollar Index (DXY) was trading around its strong support level of 100.50 to 100.80, but it rapidly recovered to the 104.50-105.00 region. This zone offered considerable support for the Dollar Index, which the price closely tracked before soaring rapidly above it. Previously, from February to May, the 100.50-100.80 zone offered steady support. The DXY rallied quickly, trading between 106.50 and 107.00.

The US Dollar Index (DXY) has experienced considerable selling pressure, retreating from weekly highs of 104.50-105.00. We'll go over all of this with a chart and several time frames. Please have a look.

• DXY has a strong support range of 100.50-100.80.
• Based on historical trends, the DXY may rise to 105.50-107. 
• The chart shows a probable triple bottom between 100.50 and 100.80, and the DXY has been steadily rising since testing this important support level. 

Please check the chart above, which illustrates an important support zone. The Dollar Index climbed as bulls successfully maintained the 100.50-100.80 barrier. As we observed in 2023, the Dollar Index often swings horizontally in the 100.50 to 105.50 range. DXY could soon trade between 105.50 and 107.

The previous and current months' CPI data bolstered dollar bulls, followed by unemployment claims data, and the index climbed from 102.20 to 104.50/105.00. Today's CPI figures aided the Dollar Bulls.

The US CPI increased 0.4% for the month, in line with expectations and up from 0.3% in January. Headline CPI inflation rose to 3.2% year on year, up from 3.1% in January. The US core CPI increased by 0.4% month on month, beating predictions of 0.3%. The headline core CPI increased 3.8% year on year, down from 3.9% in January and falling short of the expected 3.7% increase.

Based on charts and statistics, we can conclude that the DXY is bullish and will move within the 105.50-107.00 range. It may return to the 102.50-102.00 level in the near future, but each down move allows bulls to push prices higher into the 105.50-107.00 zone.

Please refer to the Dollar Index weekly chart for support and resistance levels. Each level is represented by a spot chart.