The US Dollar Index is trading around 102.44 near its annual high ahead of the Fed's interest rate decision announcement.
The US Dollar Index (DXY) on October 28 at 08:58 Moscow time was around the 102.44 mark with an increase of 0.12 percent. This value is close to the 52-week high, which was 102.94. Over the past week, the index added 0.65 percent, and over the month — 1.23 percent.
Today at 21:00 Moscow time, the US Federal Reserve will announce its key rate decision. The market largely expects the rate to remain unchanged after the September hike to the 3.75–4.00 percent range. According to futures data, the probability of a rate hike in December exceeds 80 percent. Therefore, the main focus will be on the wording regarding inflation and future policy steps.
With a hawkish signal, emphasizing the persistence of inflation and the possibility of further tightening, bond yields may rise and support the dollar. In this case, a breakout of the 102.49 level will open the way to 102.65, and consolidation above it will increase the chances of testing the 102.90–102.95 zone. The daily RSI is at 62.49, ADX — 35.52, and the price is above all key moving averages, indicating the preservation of a strong trend without signs of overbought conditions.
With a dovish signal, where the emphasis shifts to the slowdown of the economy, the index may quickly lose the support of expectations. Loss of the 102.07 level will indicate a weakening of the short-term structure, and below 101.82 the next zone will be 101.65. Consolidation under 101.65 could return the index to the 100.77–101.20 area.
Since October 15, the index has remained in the 101.45–102.45 range. Holding this range preserves the bullish structure, and a breakout beyond its limits will increase the risk of correction. Additional factors include rising US bond yields, inflation data above expectations and positive MACD with a negative histogram, indicating a weakening of the growth momentum.