DXY Index Prediction as US Dollar Prints Shooting Star

  • DXY index jumped over the last four months consecutively.
  • It rallied amid a continued global risk surge in September.
  • The Federal resorted to extended interest rate hikes.

The United States dollar index has witnessed a massive bullish trend within the last few months. XY had soared over the past consecutive four months, changing hands at the highest mark since May 2001 during this publication. Moreover, the index had gained over 16% in 2022 and nearly 35% beyond 2020’s lowest point.

USD: September Review

The United States dollar index remains crucial for measuring the greenback’s performance against other currencies. It comprises primary currencies such as the euro, Japanese yen, Swiss franc, and sterling. The USD index tends to soar amidst high risks within the financial space.

That’s why the index climbed to its highest mark in over two decades this year. Global tensions increased amid nuclear war threats as Russia escalated the Ukraine conflict. Moreover, the economy stares at a global recession amid continued rate hikes by central banks.

The United States Federal has hiked by 300bp this year. Also, Europe had renowned banks such as Norges Bank, Bank of England, Riksbank, European Central Bank, and Swiss Nation Bank maintained rate increases in September and promised more hiking.

The global economy remains prone to recession, considering the surging bond yields. Also, the markets remained concerned about the financial industry amidst escalating Credit Suisse crisis. October sessions will see the USD index reacting to the current global economic events.

Extended military undertakings in Ukraine & nuclear weapon threats might welcome more gains. With the Bank of England and the Federal not meeting, markets would focus on other central banks, including the Bank of Japan, the Bank of Canada, and the European Central Bank.

DXY Index Prediction

The USD index extended its bullish bias, climbing beyond the crucial resistance at $103 – the highest mark since 16 March. Meanwhile, the index stayed beyond all MAS, whereas the RSI (Relative Strength Index) swayed above the overbought region.

Thus, the dollar index might enjoy a breath as it printed a shooting star setup. This pattern represents a bearish signal in the price analysis. Such an occurrence will clear the road to the support at $105.