Dollar Index (DXY) Climbs to a Two-Month High
Today, the Dollar Index (DXY) is trading above the 99 mark, reaching its highest level since ahead August. The greenback’s strength is being bolstered by fragileness in other major currencies:
→ The Japanese yen is under pressure amid expectations of looser monetary policy. Conservative politician Sanae Takaichi could become Japan’s first female prime minister, pursuing significant fiscal spending and economic stimulus.
→ The euro remains weighed down by political turmoil in France. later than Prime Minister Sébastien Lecornu’s resignation, President Emmanuel Macron confirmed plans to appoint a new prime minister this week.
The question now is whether the DXY can sustain its upward momentum.
Technical Outlook for the DXY
On 19 September, our DXY analysis pointed to several key developments:
→ A descending channel (marked in red) with intermediate QL and QH lines dividing it into quarters remained relevant.
→ A rebound from the QL line was observed (marked with an arrow).
→ We proposed a bullish scenario targeting the QH line.
Recent price action has validated this view:
→ On 25 September and 6 October, the QH line acted as resistance.
→ On 7 October, a decisive break above this level confirmed bullish control.
Current dynamics suggest bulls still hold sway, with:
→ DXY movements since mid-September forming an upward channel;
→ the upper boundary of this channel serving as a likely resistance level, which could trigger a pullback towards support;
→ the top of the red channel representing a key target for the rally that began last month.
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