US Dollar Index Price Forecast: DXY sits near two-week top, above 102.00 ahead of FOMC

• DXY struggles to capitalize on modest intraday gains on Wednesday to a near two-week high.
• Bulls opt to lighten their bets and wait for the outcome of the key two-day FOMC meeting.
• The constructive technical setup suggests that the path of least resistance is to the upside.

The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, eases from a nearly two-week high, touched earlier this Wednesday, as bulls turn cautious ahead of the crucial FOMC decision. The index, however, lacks follow-through and currently trades around the 102.35 region, nearly unchanged for the day.

The US Federal Reserve (Fed) is widely expected to keep interest rates unchanged at the end of a two-day meeting, suggesting that the focus will be on the accompanying policy statement and Chairman Kevin Warsh's press conference. Investors will look for more cues about the Fed's future policy path, which, in turn, should provide a fresh impetus to the DXY ahead of Thursday's key US macro releases – the Advance Q3 GDP report and the Personal Consumption Expenditures (PCE) Price Index.

From a technical perspective, the index maintains a constructive bullish bias following the recent breakout through the 50-period Simple Moving Average (SMA) on the 4-hour chart and above the mid-range Fibonacci retracement levels. The lack of follow-through momentum beyond the 61.8% Fibo. retracement, however, warrants some caution for DXY bulls before positioning for any further upside. Moreover, oscillators on the said chart suggest firm but increasingly stretched bullish momentum.

Meanwhile, any further pullback could find initial support at the 50% Fibo. retracement at 102.20, which is followed by the 38.2% retracement at 102.02 and the 50-period SMA at 101.88. A deeper fall would expose the 23.6% level at 101.81 ahead of the structural floor near 101.45. On the topside, a fresh leg up beyond the 61.8% retracement at 102.38 might confront immediate resistance near the 78.6% level at 102.63,  with further barriers clustered near the prior swing high area near 102.95.

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

DXY 4-hour chart