In the latter half of February, the dollar index has shown signs of strength, supported by several bullish factors:
→ Hawkish Fed stance: Minutes from the most recent FOMC meeting highlighted divergent opinions on interest rate cuts. With inflation remaining persistent, some members suggested the possibility of further rate hikes.
→ Geopolitical and trade pressures: Rising tensions between the US and Iran, alongside tariff uncertainties, have encouraged demand for the dollar as a safe-haven asset.
→ Economic fundamentals: Recent reports on industrial production and the labour market indicate resilience in the US economy, bolstering the currency.
Consequently, the DXY chart shows a forming upward trend line (in blue), suggesting the index could close February higher after three months of consecutive declines.
DXY Technical Overview
As of 16 February, the DXY chart shows:
→ The descending channel from November 2025 (highlighted in red) remains intact.
→ Strong buying interest is evident from the sharp rebound (arrowed) following the brief dip below the multi-month low at 96.50 in late January.
Lower highs at points A and B indicate that the channel’s upper boundary continues to act as resistance, while price hesitation after the 5 February high signals weakening bullish momentum.
Still, strong demand near the 96.50 level suggests bulls could regain control and attempt to challenge the broader downtrend over the coming days.
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