DXY OUTLOOK BEFORE FOMC | Will the Dollar Break Trend 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.
USDX trade ideas
SELL DXYThis week the USD has been retracing, most traders are going long but we know how this goes. Based of our strategy and approach we are still very much bearish on the USD. Our positions for shorts are at 99.916 and adding more shorts at 100.500. Our targets remain at 94.760. If you are catching this set up now then your stops should be above 1011.300. Use proper risk management and risk what you can afford to loose. Best of luck folks.
Dollar At Resistance; Will Lower CPI Cause New Drop? We had a volatile start of a new trading week.
The dollar moved higher across the board as the US and China appear to be moving toward lowering tariffs, suggesting progress toward a potential trade deal. As a result, stock futures are also trading to the upside. However, keep in mind that sharp moves on Monday can easily be reversed through the rest of the week, possibly even today, after US CPI came out lower than expected, which can cause some weakness on yeilds, and possibly FED will be ready to cut rates after-all.
So, I think that USD can still come under pressure, especially if we also consider that rise on DXY is in three legs and that a lot fo gaps from this weekend are still unfilled.
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👍 Hit like if you find this analysis helpful, and don't hesitate to comment with your opinions, charts or any questions.
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US Dollar Index - Classic Bearish PatternUS Dollar index has successfully broken down from the previous support which held strongly in the past, after support broke we saw successful retest of the support as the new resistance and got rejected from the resistance, now its heading towards the next support
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Cheers
GreenCrypto
the trap has layerswhat if i told you the dxy was not done yet,
what if i told you, there was 1 more push up,
1 more test before it truly breaks and starts a bull market.
what if i told you that on that final test, that final push up,
the crypto market breaks and takes everything.
---
you probably wouldn't believe me.
---
looking at the dxy as a simple zig-zag with a complex flat in the b-wave.
once wave b is completed, at about 110-111,
i predict it drops down, deep
and while it drops,
it triggers alt season.
🌙
DXY 4hr char anlaysis I expect the DXY to enter a temporary bullish phase, likely as part of a corrective move. The price may rise toward the 100.781 – 101.00 zone.
From that level, I anticipate a bearish reversal, with the potential for the price to decline toward the 97.00 – 94.00 region.
This outlook is based on my own understanding and experience in the market — it's not guaranteed to be 100% accurate, but it's a well-considered forecast. I estimate there's about an 80% probability that the market will follow this scenario.
DOLLARThe US Dollar Index (DXY) Yearly Support and Potential Sell-Off to 96 Zone: Role of 10-Year Bond Yields and Interest Rates
1. Technical Outlook: DXY Support Breakdown and 96$ Target and Critical Support Levels.
The DXY recently breached the 200-week moving average (200-WMA), a key multi-year support level, signaling a potential trend reversal .
A sustained break below 98.00 could trigger a steeper decline toward 96.00-95$ long-term uptrend ascending trendline acting as 6months support floor connecting 2008, 2011 and 2020, . However, analyst projections also highlight the 96–95 zone as a plausible target if Fed rate cuts and macroeconomic headwinds persist .
Current Context (May 2025):
The DXY is testing 98.4 on weekly charts, with bears eyeing lower supports amid weakening USD sentiment .
A drop to ascending trend line on 6months would align with forecasts tied to Fed policy shifts and global currency strength .
2. 10-Year Bond Yield and Interest Rate Dynamics
Direct Relationship with the Dollar:
The 10-year Treasury yield and USD share a strong correlation: higher yields attract foreign capital, boosting dollar demand, while lower yields weaken the currency .
As of May 2025, the 10-year yield hovers near 4.54%, down from peaks but still elevated compared to global peers .
Impact of Rate Cuts and Policy Divergence:
Fed Rate Expectations: Markets price in five Fed rate cuts by late 2025, which would reduce yield advantages and pressure the dollar .
Policy Divergence: The ECB and BoJ are expected to maintain or ease policies, while the Fed delays cuts, temporarily supporting USD. However, prolonged easing could reverse this advantage .
3. Key Drivers of Dollar Weakness Toward 96-95 ascending trendline
Bearish Factors:
Yield Decline: A drop in the 10-year yield (e.g., due to Fed cuts or recession fears) would erode USD appeal. For every 1% decline in yields, the DXY could fall 3–5% .
Risk Sentiment: A "soft landing" scenario or rally in risk assets (stocks, commodities) may reduce safe-haven USD demand .
Tariff and Geopolitical Risks: Escalating US-China/EU trade tensions could weaken the USD if global growth fears dominate .
Bullish Counterpoints:
Hawkish Fed Surprises: Strong US data (e.g., inflation, jobs) may delay rate cuts, keeping yields and the dollar elevated .
Safe-Haven Flows: Renewed geopolitical/market turmoil could revive USD demand despite lower yields .
4. Summary: Interplay Between Yields, Rates, and DXY
Factor Impact on DXY
10-Year Yield Rises Strengthens USD (investor inflows)
10-Year Yield Falls Weakens USD (capital outflows)
Fed Rate Cuts Pressures USD (narrows yield gap)
ECB/BoJ Easing Supports USD (policy divergence)
Path to 96: A combination of Fed rate cuts, declining 10-year yields, and stronger global currencies (EUR, JPY) could drive the DXY toward 96–95 .
Reversal Risks: Hawkish Fed pivots or safe-haven demand amid crises may stall the decline.
Conclusion
The DXY’s potential drop to the 96–95 zone hinges on sustained declines in the 10-year Treasury yield and Fed rate cuts, compounded by technical breakdowns. While policy divergence and safe-haven flows offer temporary USD support, broader macroeconomic shifts (e.g., tariff risks, global growth) could accelerate the sell-off. Traders should monitor yields, Fed rhetoric, and technical levels on demand floor and supply roof for confirmation of bearish or bullish momentum
DXY | Harmonic Patterns | Technical Analysis. Recovery Underway?TVC:DXY
Over recent sessions, I’ve been highlighting a critical zone for the TVC:DXY between $98.70 and $98.80 , where several important technical patterns are forming that could signal the start of a rebound after the recent decline.
➡️ The dollar broke below the Head and Shoulders neckline at $100.27 , hitting the default target I projected at $98.69 , which corresponds to the 200% Fibonacci extension. This is a classic confirmation of the breakdown and subsequent drop.
➡️ However, since reaching this level, the TVC:DXY has begun to form strong bullish patterns:
Bullish Crab Pattern at the 161.8% Fibonacci extension, projected at $98.91
Bullish Alt-Bat Pattern at the 113% Fibonacci extension, at $98.80
These emerging bullish setups suggest a solid potential reversal, indicating that the TVC:DXY might be preparing to recover.
🎯 The default targets for these bullish patterns are around $99.95 , aligning with key resistance zones and Fibonacci confluence.
Summary: The TVC:DXY has completed the expected downward move from the Head and Shoulders pattern and is now showing clear technical signs of a possible reversal. The price action in the coming sessions will be critical to confirm whether the index can sustain this recovery toward higher levels.
Safe Traders,
André Cardoso
USD vying for Monthly Doji after April Support BounceMonthly charts are often underapprecaited by many retail traders. Sure, they're not very actionable as there's only 12 per year but they can do a great job of highlighting trends and broader market themes and, of interest for this scenario, possible turns.
As a case in point, back in January the US Dollar had a full head of steam, and there was nary a bear in sight. But that month showed as a doji in the USD and in February, the tariff theme started to take over. It was a mild pullback that month but collectively, after two months of bulls stalling, many were ready to pull the plug and that's what showed in March and continued through April as the January doji led into a stern sell-off and fresh multi-year lows.
In April, the USD was hit hard by a combination of tariff drama and trend continuation and a major spot of support eventually came into play around Easter Monday, taken from a trendline projection as well as the 38.2% Fibonacci retracement of the 2008-2022 major move.
The bounce wasn't automatic, as there was a slow grind of higher-highs and higher-lows that got another boost around the FOMC rate decision earlier in May. That rally ran all the way until a major spot of resistance came into play at 102, at which sellers reacted.
But at this point they've been stalled at another major spot on the chart of 98.98, which is helping to set a higher-low. And from the monthly chart, the USD is currently showing a doji on the monthly bar for May, which sets the table for a possible turn as we trade into the summer months.
Key for this coming to fruition will be continued recovery in USD/JPY, which has had a major impact in the USD of late. And if we do see that theme of USD-strength continue, I still favor EUR/USD as a major pair of interest for that theme. - js
BEARS STILL IN CHARGE ! DXY- USD INDEX FORECAST Q2 W22 Y25DXY USD INDEX FORECAST Q2 W22 Y25
BEARS CRUSHING THE USD!
Professional Risk Managers 👋
Welcome back to another FRGNT chart update📈
Diving into some Forex setups using predominantly higher time frame order blocks alongside confirmation breaks of structure.
✅ U.S. dollar index is a measure of the value of the dollar against a basket of six foreign currencies.
✅The currencies are the Euro, Swiss franc, Japanese yen, Canadian dollar, British pound, and Swedish krona.
🔑 Remember, to participate in trading comes always with a degree of risk, therefore as professional risk managers it remains vital that we stick to our risk management plan as well as our trading strategies.
Pairs to look out for -
EURUSD - BUY
USDCHF - SELL
USDJPY - SELL
USDCAD - SELL
GBPUSD - BUY
- Perhaps it's time to accept that a recovery in the DXY is not occurring anytime soon...
📈The rest, we leave to the balance of probabilities.
💡Fail to plan. Plan to fail.
🏆It has always been that simple.
❤️Good luck with your trading journey, I shall see you at the very top.
🎯Trade consistent, FRGNT X