U.S. Dollar Climbs to One‑Month High on Fed Hawkishness

The dollar rallied for the second straight day on Wednesday morning, hitting its highest level in nearly a month. Elevated U.S. inflation in October, hotter than expected, reinforced market expectations for a 50‑basis‑point Fed rate increase in December, a shift from earlier forecasts of a 25‑basis‑point hike. The stronger policy outlook provided solid support for the dollar.

Daily technical studies turned fully bullish after the price broke above the 10‑ and 20‑day moving averages, creating a bullish cross, and breached the upper boundary of the bear channel. This move pushed the index above the 76.4% Fibonacci retracement level of the 102.72‑to‑101.03 range, essentially completing the corrective phase. The previous week’s double bear‑trap near the 101.99 Fibonacci level also underpins the current momentum.

Under present fundamentals, the dollar appears poised for further upside. A key resistance level sits at 102.72, marking the 2026 peak and a near‑50% retracement of the January 2025‑2026 downtrend. A breach of this barrier would signal bullish continuation, with next targets at 104.15 and 104.40 (the March 28, 2025 high and a 61.8% Fibonacci extension). Traders may pause to reassess, however, with the 102‑zone—representing a broken bear‑channel trendline and a 61.8% Fibonacci level—expected to contain any dips.

Res: 102.40; 102.72; 103.00; 103.37
Sup: 102.07; 101.90; 101.68; 101.30

Source link