US Dollar Index Technical Analysis: Game-changing moment for 2024

The US Dollar Index (DXY) performance shows that markets are still trembling after this week’s shocks. Hot US price pressures for a third consecutive month are quickly shifting Fed rate cut bets to later this year, breaking the governing dynamics for this year thus far. 

From now on, it becomes clear that whichever central bank – and accordingly the currency – needs to start cutting its benchmark rate will face severe punity from markets. On the contrary, central banks keeping rates steadier for longer are likely to be rewarded with a further appreciation in their currency provided that their economy is robust despite the current high rate regimes. The pack is being split in half: while weaker economies are set to get their currencies exposed, stronger ones are expected to rally further. 

On the upside, the first level for the DXY is the November 10 high at 106.01, just above the 106.00 figure. Further up and above the 107.00 round level, the DXY Index could meet resistance at 107.35, the October 3 high.