US Dollar Technical Forecast: DXY Bulls Target Yearly Highs After Hot CPI

US Dollar Index Technical Forecast: USD Weekly Trade Levels (DXY)

The U.S. Dollar has rallied 1.3% from the November low, with DXY attempting to extend a third consecutive weekly advance.
Weekly RSI has reached its highest level since January 2025, although developing bearish divergence warns that the recovery may be vulnerable.
Bulls are approaching a major resistance confluence, with a decisive weekly close above this threshold needed to fuel the next leg of the broader advance.
Initial support remains well-defined, with a break below the yearly pitchfork median line needed to suggest a more significant high is in place.
Stronger-than-expected U.S. inflation has reinforced expectations for further Fed tightening, with PPI and Fed commentary keeping event risk elevated into the weekly close.
Resistance 102.86/99 (key), 103.82, 104.59/81- Support 101.46, 100.99, 100.16/42

The U.S. Dollar has regained its footing following last month's sharp reversal, with buyers defending the broader ascending structure that has guided price action throughout the year. The subsequent recovery has brought DXY back toward a pivotal technical barrier where longer-term trend resistance converges with several major price levels. Despite the resilience of the broader advance, the latest push higher has yet to establish a decisive breakout, leaving the index vulnerable to another rejection as it approaches this critical inflection zone. The focus now shifts to whether bulls can sustain a move beyond this threshold and reinforce the uptrend heading into mid-November. Battle lines drawn on the DXY weekly technical chart.

Review my latest Weekly Strategy Webinar for an in-depth breakdown of this EUR/USD technical setup and more. Join me live Mondays at 8:30am EST and tune in to the Opening Bell Tuesday through Friday at 9:30am EST for continued market coverage throughout the week. All episodes are archived on my YouTube Playlist.

US Dollar Price Chart – USD Weekly (DXY)

Chart Prepared by Michael Boutros, Sr. Technical Strategist; DXY on TradingView

Technical Outlook: In last month’s US Dollar Technical Forecast we noted that DXY had rallied more than 4% off the August low and that, “From a trading standpoint, losses would need to be limited to 101.02 IF price is heading higher on this stretch with a close above 102 needed to fuel the next major leg of the rally.” The index marked a weekly close at 102.23 three days later with rally extending to a fresh yearly high the following week near 103. An outside-week reversal off resistance declined nearly 1.8% before exhausting last week just ahead of the median-line with DXY now attempting to mark a third consecutive weekly advance. Note that while weekly momentum has reached its highest level since January 2025, bearish divergence signals growing vulnerability in the near-term advance.

The 61.8% parallel of the yearly pitchfork is now in view with lateral resistance eyed just higher at 102.86/99. This region is defined by the 50% retracement of the 2025 decline, the yearly high, the 2016 high close (HC) and the 2020 swing high. A breach / weekly close above this pivot zone is needed to fuel the next leg of the rally. Subsequent resistance objectives are eyed at the 2017 high at 103.82 and 61.8% retracement / 100% extension of the yearly advance at 104.59/81. Both levels of interest of possible topside exhaustion / price inflection IF reached.

Initial support rests with the July high close (HC) at 101.46 and is backed closely by the 100% extension of the October decline at 100.99. Note that the median line converges on this threshold over the next few weeks and a break / weekly close below would be needed to suggest a more significant high is in place, and a larger reversal is underway. The next major technical consideration rests with the 2024 low / low-week close (LWC) at 100.16/42.

Bottom line: The U.S. Dollar has rallied 1.3% off the monthly low with bulls attempting to clear the yearly close high. From a trading standpoint, losses would need to be limited to 101.46 IF the index is heading higher on this stretch with a close above 103 needed to fuel the next major leg of the advance.

USD event risk remains elevated into the weekly close after today’s stronger-than-expected October CPI report. Headline prices rose 0.4% month over month versus expectations for 0.3%, while core CPI increased 0.3%, exceeding forecasts for 0.2%. Markets are now fully pricing a December rate hike and assigning an 88% probability to another 25-basis-point increase by March. Attention turns to Thursday’s jobless claims and Friday’s PPI report, alongside further Fed commentary; another firm inflation reading or hawkish policy signal would keep the dollar supported into the weekly close. Stay nimble into the release and watch the weekly close for guidance. Review my latest US Dollar Short-term Outlook for a closer look at the near-term DXY technical trade levels.

Key Economic Data Releases

Economic Calendar - latest economic developments and upcoming event risk.

Active Weekly Technical Charts

--- Written by Michael Boutros, Senior Technical Strategist

Follow Michael on X @MBForex

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

FOREX.com is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment and CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.forex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.forex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 42.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.

Delayed London Stock Exchange (LSE) Data

The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.