DXY Breaks Above 100.00 as Bulls Target 101.30

Traders' Opinions

Summary:

DXY holds around 100.30, supported by expectations of further Fed tightening and elevated Middle East tensions. Higher energy-driven inflation risks and widening US rate support keep the near-term Dollar outlook constructive.

BUY USDX

EXP

TRADING

100.200

Entry Price

101.300

99.500

99.880 -0.050 -0.05%

0.0

Pips

Flat

99.500

Exit Price

100.200

Entry Price

101.300

The US Dollar Index is back on the front foot on Friday, trading around 100.30 and remaining close to its strongest level since late July. The Greenback is also heading toward a strong weekly advance as expectations for additional Federal Reserve tightening and escalating geopolitical tensions continue to underpin demand.

The Fed delivered its widely anticipated first interest-rate increase since 2023 on Wednesday, but the bigger catalyst for the Dollar came from the outlook for policy beyond September. Updated projections showed that officials expect at least one additional rate hike before the end of the year, reinforcing expectations that US monetary conditions will remain restrictive.

Fed Chair Kevin Warsh also maintained a firm stance on inflation, emphasizing that price pressures remain too elevated. Persistent energy-driven inflation risks are adding to those concerns, particularly as geopolitical instability threatens global oil supplies. Higher energy costs could complicate the inflation outlook and strengthen the argument for further monetary tightening.

The changing rate environment is particularly important for the Dollar. UOB Group sees the recent repricing of Fed expectations as potentially reversing the narrowing in US interest-rate differentials against other major economies that had previously weighed on the DXY. With the bank now anticipating two additional Fed increases, it sees growing upside risks for the Dollar against both G10 and Asian currencies.

Geopolitical developments are providing another layer of support. Tensions surrounding the Strait of Hormuz remain elevated after Iran's IRGC reported striking a tanker attempting to pass through the waterway. Uncertainty has increased further as President Donald Trump weighs whether to resume larger-scale military action against Iran.

The combination of higher US rate expectations, persistent inflation risks and safe-haven demand leaves the Dollar with a supportive near-term fundamental backdrop. With DXY already holding above 100.00, continued expectations for Fed tightening could keep buyers focused on extending the recent advance.

Technical Analysis

The US Dollar Index is showing a clear improvement in its 4-hour structure, with DXY trading around 100.17 after an aggressive recovery from the September low near 98.50. Buyers have pushed the index through several layers of resistance, bringing price back above the psychologically important 100.00 threshold.

The most significant development is the move through the 99.95–100.10 resistance zone. This region previously acted as an important barrier and its recovery strengthens the argument that the recent advance is developing into something more substantial than a temporary rebound. The sequence of higher lows since early September also supports the improving bullish structure.

Immediate attention now turns toward 100.20–100.30. A convincing H4 close above this area would provide additional confirmation that buyers have established control. The chart suggests price could initially push through the level before undergoing a brief retest of the 100.00 region. If former resistance converts into support, the setup would favor another strong leg higher.

Beyond the breakout area, there is relatively limited visible resistance until the major 101.30–101.40 supply zone. This region capped advances during both June and July and therefore represents the principal upside objective for the current recovery.

The lower structure also provides bulls with several layers of protection. 99.95–100.05 is the first support following the breakout, while 99.15–99.25 represents the next substantial demand zone. A sustained move back below 99.15 would significantly weaken the bullish scenario and place the broader recovery under pressure.

Overall, DXY appears to be transitioning from recovery into bullish continuation. A successful hold above 100.00, followed by confirmation through 100.30, would keep the path open toward 101.30–101.40, with a short-term pullback likely to provide the next test of buyer strength.

TRADE RECOMMENDATION

BUY DXY

ENTRY PRICE: 100.20

STOP LOSS: 99.50

TAKE PROFIT: 101.30

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DXY Breaks Above 100.00 as Bulls Target 101.30

Technical Analysis

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