Amaya Eddleston
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The Consumer Price Index is a key measure of inflation in the US. February's reading is expected to be 7.9%. If this impression is correct, prices are up almost 8% from a year ago. Powell said that the Fed will raise rates in March. The investors expect more to come and that's why the price of DXY is going up.
The US dollar index has been rising since May 2021. The index briefly traded above the upper trend line in late November, only to come back inside the channel. When price doesn't break above one side of the channel, it often moves to the other side. The price moved back inside the channel and tested the lower trend line in January.
The price has continued to go up. On Friday, the DXY closed above the upper trend line of the channel and above horizontal resistance.
It continued higher, breaching additional horizontal resistance and the 161.8% extension from the Jan 28 high to Feb 4 low. The psychological round number resistance level at 100.00, the horizontal resistance at 100.87 and the March 2020 highs should be passed if the price continues higher. The RSI is in oversold territory, which may mean that the DXY is ready for a correction.
StoneX is a source of Trading View.
There are short-term support levels that come into play during a time frame. The upper trend line of the long-term channel and horizontal support are first support.
The horizontal support is near 97.82.
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