DXY OUTLOOK BEFORE FOMC | Will the Dollar Break Trend or Just Retrace?
The US Dollar Index (DXY) has rebounded after weeks of relentless selling pressure, but this bounce is now approaching key decision zones just ahead of two critical events: the April PCE report and the next FOMC meeting. With macro data and sentiment diverging, traders should closely monitor how the dollar reacts to upcoming catalysts.
🌍 MACRO & FUNDAMENTAL CONTEXT
Core PCE Price Index (Apr) – due Friday – is the Fed’s preferred inflation gauge. A higher-than-expected print may reinforce the “higher for longer” stance on rates.
FOMC Minutes revealed a growing divide within the committee: some members remain open to further tightening if inflation stalls.
Bond market stress is emerging again, as 10Y yields hover near 4.5%. Fiscal concerns and treasury auctions are weighing on investor sentiment.
Political noise – particularly from former President Trump’s shifting tariff threats – adds short-term volatility to USD expectations.
🧠 Bottom line: While the dollar has regained ground, macro risks remain asymmetric. A hot PCE may spark short-term demand for USD, but structural credibility risks are still on the table.
📊 TECHNICAL INSIGHT – H1 STRUCTURE
Price Channel: DXY broke slightly above a well-respected descending channel that started mid-May.
EMA Confluence: EMA 13, 34, and 89 are beginning to align upward but haven’t fully confirmed a bullish trend yet.
Key Retest Zone: 99.08 is a critical zone — a Fibonacci 38.2% level of the recent breakout. A hold here may support another test higher.
🔑 KEY TECHNICAL LEVELS
Immediate Support: 99.08 (Fib 38.2% + channel retest)
Mid Resistance: 100.02 (round number + previous structure high + near 200 EMA)
Major Target Zone: 100.48 (Fib 61.8% + multi-day pivot)
📈 POTENTIAL PRICE SCENARIOS
If DXY respects 99.08, a continuation toward 100.02 and even 100.48 is plausible as a technical correction.
If DXY fails to hold 99.08, the breakout above the trend channel may turn into a false break, opening the door for a re-test of lower channel support near 98.30.
Watch for price behavior around 100.02 — aggressive sellers may re-enter at this level, especially if macro data disappoints.
⚠️ STRATEGIC REMINDER
Avoid chasing mid-range price action.
Let the market reveal its hand post-PCE.
Volatility is expected to spike — be patient and let key levels define directional conviction.
The US Dollar Index (DXY) has rebounded after weeks of relentless selling pressure, but this bounce is now approaching key decision zones just ahead of two critical events: the April PCE report and the next FOMC meeting. With macro data and sentiment diverging, traders should closely monitor how the dollar reacts to upcoming catalysts.
🌍 MACRO & FUNDAMENTAL CONTEXT
Core PCE Price Index (Apr) – due Friday – is the Fed’s preferred inflation gauge. A higher-than-expected print may reinforce the “higher for longer” stance on rates.
FOMC Minutes revealed a growing divide within the committee: some members remain open to further tightening if inflation stalls.
Bond market stress is emerging again, as 10Y yields hover near 4.5%. Fiscal concerns and treasury auctions are weighing on investor sentiment.
Political noise – particularly from former President Trump’s shifting tariff threats – adds short-term volatility to USD expectations.
🧠 Bottom line: While the dollar has regained ground, macro risks remain asymmetric. A hot PCE may spark short-term demand for USD, but structural credibility risks are still on the table.
📊 TECHNICAL INSIGHT – H1 STRUCTURE
Price Channel: DXY broke slightly above a well-respected descending channel that started mid-May.
EMA Confluence: EMA 13, 34, and 89 are beginning to align upward but haven’t fully confirmed a bullish trend yet.
Key Retest Zone: 99.08 is a critical zone — a Fibonacci 38.2% level of the recent breakout. A hold here may support another test higher.
🔑 KEY TECHNICAL LEVELS
Immediate Support: 99.08 (Fib 38.2% + channel retest)
Mid Resistance: 100.02 (round number + previous structure high + near 200 EMA)
Major Target Zone: 100.48 (Fib 61.8% + multi-day pivot)
📈 POTENTIAL PRICE SCENARIOS
If DXY respects 99.08, a continuation toward 100.02 and even 100.48 is plausible as a technical correction.
If DXY fails to hold 99.08, the breakout above the trend channel may turn into a false break, opening the door for a re-test of lower channel support near 98.30.
Watch for price behavior around 100.02 — aggressive sellers may re-enter at this level, especially if macro data disappoints.
⚠️ STRATEGIC REMINDER
Avoid chasing mid-range price action.
Let the market reveal its hand post-PCE.
Volatility is expected to spike — be patient and let key levels define directional conviction.
⚜️ Trade with Money Market Flow, logic, Price action 📉📈
⚜️Risk Reward 1.3 to 2.5...
⚜️Daily 8 to 15 Signals Vip
⚜️Risk Reward 1.3 to 2.5...
⚜️Daily 8 to 15 Signals Vip
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
⚜️ Trade with Money Market Flow, logic, Price action 📉📈
⚜️Risk Reward 1.3 to 2.5...
⚜️Daily 8 to 15 Signals Vip
⚜️Risk Reward 1.3 to 2.5...
⚜️Daily 8 to 15 Signals Vip
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.