FX.co ★ U.S. Dollar Index (USDX) in Forex Trading

Dollar index Daily Time Frame Update The dollar experienced a surge of selling pressure early last week as concerns about de-dollarization returned after a month-long hiatus. After the Federal Reserve failed to persuade investors over the timing and quantity of rate cuts in 2026, the selling came to a screaming halt on Tuesday, January 27, and the index began its rebound. The surge gained momentum on Friday, with a gain of 1.02%. The move was spurred by two factors: President Trump's selection of Kevin Warsh as the Federal Reserve's chairman and hotter-than-expected Producer Price Index (PPI) data. According to the PPI report, U.S. producers raised prices in December by the greatest amount in five months. The pass-through of import tariffs was probably the cause of this. The primary worry is that manufacturers would pass the rise on to consumers, raising inflation in the upcoming Consumer Price Index (CPI) report. The Fed might decide to keep rates unchanged for longer if the CPI rises. Uncertainty around the Warsh nomination is the reason we might witness range-bound trade. The currency was under pressure because traders had factored in two rate cuts by the Fed in 2026. When Warsh was nominated last week, sellers stopped. The market is beginning to believe that the Fed won't lower rates until June, the first meeting following Warsh's appointment, since Powell's term ends in May and Warsh doesn't start until June. Given that Warsh hasn't discussed interest rates since his appointment, it's plausible that he may lower rates more drastically than the market had anticipated. Technically, the daily swing chart and moving averages show that the primary trend is downward. 99.492 is the closest swing peak and trend shift point. Both the 200-day moving average (98.600) and the 50-day moving average (98.426) are above this. Thus, the downturn is evident, and the main resistance is fairly strong. 99.492 to 95.551 is the short-term range. The Monday surge was halted at 97.733 by its retracement zone between 97.522 and 97.987. The short-term trajectory will probably depend on how traders respond to this zone.