Dollar Index Eyes 104.64 as US Inflation Reaccelerates to 4%

By Olivia Hart

US consumer prices rose 0.4% month over month in October 2026, and annual inflation accelerated to 4.0% from 3.7% — numbers strong enough to put another Federal Reserve rate hike back on the table and lift the US Dollar Index toward a key technical ceiling. That is the core of a new analysis published on TradingView by the contributor forexcitypro_leemeenal, citing the U.S. Bureau of Labor Statistics and the Associated Press.

The report's thesis is simple: hotter inflation, hawkish Fed, stronger dollar. The evidence behind each link, however, deserves a closer look.

What do the inflation numbers actually show?

September's CPI increase was 0.6%; October's 0.4% print, while softer, still signals persistent price growth. Annual inflation reportedly jumped to 4.0% from 3.7% — a 0.3-percentage-point pickup in a single month.

More notably, the analysis argues that inflationary pressure is no longer confined to energy. Price increases have spread across several goods and services categories. That breadth matters: broad-based inflation is harder for the Fed to dismiss than a single volatile category.

Even so, the author concedes the point skeptics would raise first — nothing here guarantees further tightening. Future decisions, the report states, will depend on inflation, employment and broader economic developments.

Are two more rate hikes coming?

A Reuters economist poll published November 10 found most surveyed economists expect another 25-basis-point increase in December. A significant number expect at least two additional rate increases.

Some Fed officials, according to the analysis, have argued that persistent inflation may require monetary policy to move further into restrictive territory.

The word to watch is "may." The report itself flags that two additional hikes are not guaranteed — a caveat worth holding onto, since market pricing of Fed moves has reversed repeatedly in past cycles.

Why would this support the dollar at all? The analysis lists four channels:

• Higher interest rates increase the attractiveness of dollar-denominated assets.
• Rising US Treasury yields may strengthen demand for the dollar.
• Reduced expectations of monetary easing generally support the USD.
• Safe-haven demand during global uncertainty may also benefit the dollar.

The takeaway: the dollar's case rests on data continuing to cooperate, not on a done deal.

Where does the technical chart point?

The Dollar Index trades around 103.41, testing near-term resistance at 103.255–103.512. Major resistance sits at 104.639 — roughly 1.2% above current levels.

The daily chart, in the author's reading, shows higher highs and higher lows over recent months, indicating improving momentum and stronger buying pressure.

The bullish scenario requires a close above 103.255–103.512 and a successful hold during a retest. Only then, the author argues, does the probability of further upside increase, with 104.639 as the next major target.

If selling pressure wins instead, the analysis identifies four support zones below:

• First support: 101.420–101.510
• Second support: 98.615–98.685
• Third support: 97.640–97.761
• Major lower support: 96.468

A confirmed breakdown below 101.420–101.510, the report notes, could weaken the short-term bullish structure — the first level at which this trade thesis would start failing on its own terms.

What is the stated trading bias?

Bullish. The author sees potential for further upside as long as the daily structure of higher highs and higher lows remains intact and major support levels hold.

But even here the promise comes with a condition: a confirmed breakout and a successful retest would provide a stronger basis for new long positions. In plain words, the bullish call is provisional until the index clears 103.512 and proves it can stay there.

The analysis carries a disclaimer: it is for educational and informational purposes only and does not constitute financial advice, and currency markets remain exposed to central bank decisions and unpredictable global events.

The practical test arrives with the next round of inflation and employment data — and with whether the Fed in December matches what economists now expect.