U.S. Dollar Index (DXY) – Pro Analysis | 1H Chart |1. Strong Bullish Momentum
DXY broke out sharply above the 99.41 resistance, showing clear strength from bulls with minimal pullbacks during the rally.
2. Short-Term Rejection at Supply
Price was rejected from the 99.978 zone — a key supply area. This indicates the presence of active sellers near the psychological 100 level.
3. Retesting Breakout Structure
Currently hovering just above 99.669, the DXY is retesting the previous breakout level. This could act as short-term support if bullish momentum resumes.
4. Next Key Zones
Resistance: 99.978 → 100.534
Support: 99.411 → 98.92
Break below 99.411 may invalidate the breakout.
5. Outlook
Bias remains bullish above 99.41. However, failure to reclaim 99.978 soon may signal temporary exhaustion or consolidation before next leg up.
DXY trade ideas
DOLLAR INDEXDepartments Responsible for Each Economic Report
Indicator Responsible Department/Source
Average Hourly Earnings m/m U.S. Bureau of Labor Statistics (BLS), part of the Department of Labor
Non-Farm Employment Change BLS (Establishment Survey)
Unemployment Rate BLS (Household Survey)
Final Manufacturing PMI S&P Global/Markit (private company)
ISM Manufacturing PMI Institute for Supply Management (ISM, private sector)
ISM Manufacturing Prices Institute for Supply Management (ISM)
Revised University of Michigan (UoM) Consumer Sentiment University of Michigan (private/public university)
Construction Spending m/m U.S. Census Bureau, Department of Commerce
Revised UoM Inflation Expectations University of Michigan
How the Federal Reserve Interprets “Greater Than” or “Lower Than” Forecast
1. Average Hourly Earnings,
2.Non-Farm Payrolls,
3. Unemployment Rate
Higher than forecast (stronger labor market):
Tight labor markets (higher wages, more jobs, lower unemployment) suggest inflationary pressure.
The Fed may view this as a signal to keep rates higher for longer, as wage and job growth could fuel inflation.
Lower than forecast (weaker labor market):
Signals cooling in employment and wage growth, reducing upward pressure on inflation.
The Fed may see this as justification to consider easing policy or at least pausing further rate hikes.
2. Manufacturing PMIs (ISM, S&P)
Above 50: Signals expansion in manufacturing; below 50 indicates contraction.
Higher than forecast: Points to stronger economic momentum; the Fed may see upside risks to inflation.
Lower than forecast: Indicates weaker manufacturing activity; a possible sign of slowing demand, which could support rate cuts or dovish policy if persistent.
3. ISM Manufacturing Prices
Higher than forecast: Suggests inflationary pressures in manufacturing input costs; Fed interprets this as a reason for vigilance on inflation.
Lower than forecast: Implies easing input price pressures, supporting a dovish outlook if inflation remains subdued.
4. University of Michigan Consumer Sentiment & Inflation Expectations
Stronger than forecast sentiment: Consumers are more optimistic, often a sign of solid spending potential. May amplify inflation if this leads to greater demand.
Higher inflation expectations: If consumers expect higher future inflation, this can become self-fulfilling and the Fed may maintain tighter policy.
Weaker sentiment/lower inflation expectations: Reduces inflation risk, gives the Fed more flexibility to ease if needed.
5. Construction Spending
Higher than forecast: Indicates resilient investment and demand in the real economy.
Lower than forecast: Suggests cooling real estate and infrastructure spending; may support a dovish Fed outlook if sustained.
Summary Table
Data Surprises Interpretation for Fed Policy
Higher-than-forecast More hawkish; raises risk of persistent inflation
Lower-than-forecast More dovish; reduces pressure to hold rates higher
The Fed looks at the overall pattern across these data. Persistent upside surprises heighten concerns about inflation, supporting tighter policy. Downside surprises suggest cooling economic momentum and may encourage future rate cuts or pauses. The relative impact depends on which indicators surprise and the broader economic context.
#DXY #DOLLAR
U.S. Dollar Index (DXY) Technical Analysis – 4-Hour TimeframeU.S. Dollar Index (DXY) Technical Analysis – 4-Hour Timeframe
Following yesterday’s economic data from the United States, which included stronger-than-expected GDP growth and consumer confidence figures, the U.S. Dollar Index (DXY) has continued its upward trend with strength. These developments have reinforced expectations for continued monetary tightening—or at least keeping interest rates elevated—which in turn has boosted demand for the dollar.
On the 4-hour chart, after a strong bullish rally, the dollar index has now reached a key resistance zone that previously acted as a major barrier.
Bullish Scenario:
If the current resistance zone is decisively broken and price stabilizes above it, the bullish momentum could extend further toward higher technical levels. This scenario would gain additional strength if upcoming economic data continues to support the dollar.
Bearish Scenario:
However, if the price fails to break through the resistance and signs of buyer weakness begin to emerge, a corrective pullback toward previous support levels may occur. This scenario could be further intensified if weaker economic data is released or if the Federal Reserve signals a more dovish stance.
At the moment, traders are advised to closely monitor the price reaction to the current zone and wait for confirmation before committing to the next move.
DXY Top-Down Analysis: Market Structure & Directional Bias This video demonstrates a top-down analysis of DXY. I'll show you how to identify market structure, value areas, directional bias, and key support and resistance levels. You'll learn to analyze the market from weekly to hourly timeframes using Heikin-Ashi candles and the 200 EMA.
the retail trader outlookWe see that the wedge pattern has been completed and the bullish market is strong as the candles a huge, this is a high risk low reward trade as it clear and obvious to the vest public that the markets wants to rally. the role of the dollar price plays a vital role in this not happening as we see that the dollar has formed the yearly low as is starting to move up in an increasingly high speed suggesting that Gold is more likely to be affected by the sudden Rally in the dollar currency and the opposite is true given a drop in dollar.
DXYThe Federal Open Market Committee (FOMC) announced on July 30, 2025, that it will maintain the federal funds rate at the current target range of 4.25% to 4.50%. This keeps the rate unchanged from previous meetings, continuing a "wait-and-see" approach amid mixed economic signals. The decision was supported by a 9-2 vote. The committee highlighted that recent data suggests economic activity growth has moderated in the first half of the year, with low unemployment and somewhat elevated inflation. The FOMC indicated it would carefully assess incoming data, the evolving economic outlook, and the balance of risks before making further adjustments. There is no rate cut at this meeting, but the Fed remains attentive to risks on both sides of its dual mandate of maximizing employment and achieving inflation around 2%.
Federal Reserve Chair Jerome Powell emphasized the need for additional data, particularly regarding the impact of tariffs on inflation and economic conditions, before changing policy. The economy showed stronger-than-expected second-quarter growth, but inflation remains above the Fed's 2% target, contributing to the decision to hold rates steady. The committee's stance reflects caution despite pressure from political sources to cut rates.
The next FOMC meeting after this one will be in September 2025, and some economists predict a possible rate cut then depending on economic developments. Powell's press conference and the FOMC statement will be closely analyzed for any subtle shifts in policy tone or outlook.
In summary:
Federal funds rate maintained at 4.25% - 4.50%
Economic growth moderated but remains solid
Low unemployment, inflation somewhat elevated
Fed is data-dependent and cautious
No rate cut for now but possible in September
This is consistent with the ongoing approach since late 2024 of holding rates steady to balance inflation control and support for the labor market.
DXYThe DXY, or US Dollar Index, measures the value of the US dollar against a basket of six major world currencies: the euro (EUR), Japanese yen (JPY), British pound (GBP), Canadian dollar (CAD), Swedish krona (SEK), and Swiss franc (CHF). It is a weighted index, with the euro having the largest share, making movements in EUR/USD especially influential on the index. The DXY was created in 1973 by the US Federal Reserve to provide a clear benchmark for the dollar’s international strength after the collapse of the Bretton Woods system.
Since its inception, the DXY has served as a vital gauge of the dollar’s performance in global trade and financial markets. Historically, it reached its all-time high near 164.72 in 1985, during a period of aggressive US interest rate hikes and a strong economic expansion. Conversely, it hit its all-time low around 70.70 in 2008, at the peak of the global financial crisis, when confidence in the US economy sharply declined.
The index typically rises when investors seek safety in the US dollar, especially during global risk-off events or when US interest rates are relatively high. It also tends to strengthen during periods of US economic growth, reduced liquidity, or tightening by the Federal Reserve. On the other hand, the DXY weakens when the Federal Reserve cuts rates, inflation rises, or investor sentiment shifts toward riskier assets and other global currencies.
In the years following the COVID-19 pandemic, the DXY saw sharp movements. It rallied strongly in 2022 as the Federal Reserve raised interest rates aggressively to combat inflation, reaching levels above 114. This was followed by a pullback as inflation cooled and expectations of rate cuts emerged in 2023 and 2024. As of August 2025, the DXY stands at approximately 93.4, reflecting a weaker dollar compared to its recent highs, influenced by a more dovish Federal Reserve, growing US debt concerns, and rising investor interest in alternative assets such as gold and other currencies.
The DXY remains a key tool for traders, economists, and policymakers to assess the dollar’s position in the global economy. Its movements affect everything from commodity prices and trade balances to emerging market capital flows and inflation pressures worldwide.
Will DXY Get Supported With Fresh US-EU Trade Agreement?Macro approach:
- The US dollar index has traded mixed since last week, pressured by lingering trade uncertainty and cautious market sentiment ahead of major economic events.
- Dovish Fed expectations and subdued US inflation continued to weigh on the greenback, while news of a fresh US-EU trade agreement and upcoming talks with China contributed to two-way price action.
- Economic data reflected a resilient labor market but flagged moderating US growth, with investors closely watching forthcoming GDP figures and the Fed's policy stance.
- The US dollar index may remain range-bound as markets await catalysts, including the Fed meeting, the 2Q GDP release, and key labor market data.
Technical approach:
- DXY surged and closed above the descending trendline and the resistance at around 98600, indicating an early signal of a shift in the market trend.
- If DXY maintains above 98600, it may retest the following resistance at 99400, confluence with EMA78.
- On the contrary, closing below the descending trendline and EMA21 may prompt a retest of the swing low at 96.60.
Analysis by: Dat Tong, Senior Financial Markets Strategist at Exness
DXY | Timeframe: 1MWith the breakout of the downtrend line drawn since 1985 and its breach in late 2014, the DXY index officially entered a relatively stable upward trend and is currently oscillating within a parallel channel. Although, on the monthly timeframe, it has recently touched the lower boundary of the channel, we can expect at least a rise toward the channel’s midline. However, if the lower support of the channel is broken, a static support around the approximate rate of 88 can be considered a notable support level. Should this support also fail, the long-term downtrend dating back to 1985 would be regarded as the most important support for the DXY index. Meanwhile, moving averages such as the MA50, MA100, and other longer-period moving averages serve as dynamic supports along the way.
It is also worth mentioning that currently reaching the 120 level is considered an ideal target for the DXY index, and ultimately, it is by breaking this resistance zone that the index can reach its “Utopia”.
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DXY Surge Pressures Currency Market in Volatile Market WeekThe US Dollar Index (DXY) has held its rebound off historical support zones on both the price chart and the RSI indicator throughout July. The monthly RSI is bouncing off a support line extending between the troughs of 2008 and 2020. Meanwhile, price action is rebounding from a support trendline that connects the lows of 2008, 2014, and 2021, within the 96–94 zone.
Bearish Scenario: A solid close below this support zone may confirm a long-term bearish signal, potentially pushing the index toward the 94 and 90 levels.
Bullish Scenario: A confident move above 100 and 103 could signal a reversal in the currency market, potentially leading the DXY back toward the mid-range of the long-standing channel between 105 and 107, originating from the 2008 lows.
Written by Razan Hilal, CMT
Candle close above 100 after 2 months.If the Dollar Index manages to close above the 100 level today, following the important news release, there's a chance the upward move could continue toward the key 101 zone next week.
However, unless it breaks above the 101 level with strong momentum, the overall trend in the higher timeframes still remains bearish.
DOLLAR INDEX The federal funds rate is the interest rate at which U.S. banks and credit unions lend their excess reserve balances to other banks overnight, usually on an uncollateralized basis. This rate is set as a target range by the Federal Open Market Committee (FOMC), which is the policymaking arm of the Federal Reserve. The current target range as of July 2025 is approximately 4.25% to 4.5%.
The federal funds rate is a key benchmark that influences broader interest rates across the economy, including loans, credit cards, and mortgages. When the Fed changes this rate, it indirectly affects borrowing costs for consumers and businesses. For example, increasing the rate makes borrowing more expensive and tends to slow down economic activity to control inflation, while lowering the rate stimulates growth by making credit cheaper.
The Fed adjusts this rate based on economic conditions aiming to maintain stable prices and maximum employment. It is a vital tool of U.S. monetary policy, impacting economic growth, inflation, and financial markets.
In summary:
It is the overnight lending rate between banks for reserve balances.
It is set as a target range by the Federal Reserve's FOMC.
It influences many other interest rates in the economy.
Current range (July 2025) is about 4.25% to 4.5%.
1. ADP Non-Farm Employment Change (Forecast: +82K, Previous: -33K)
Above Forecast:
If ADP employment is much stronger than expected, the Fed would see this as a sign of ongoing labor market resilience. Robust job growth would support consumer spending, potentially keep wage pressures elevated, and could make the Fed less likely to ease policy soon. This reinforces the case for holding rates steady or staying data-dependent on further cuts.
Below Forecast or Negative:
If ADP jobs gain falls short or is negative again, the Fed may interpret it as a weakening labor market, raising recession risk and reducing inflationary wage pressures. This outcome could increase the chances of a future rate cut or prompt a more dovish tone, provided it aligns with other softening indicators.
2. Advance GDP q/q (Forecast: +2.4%, Previous: -0.5%)
Above Forecast:
A GDP print above 2.4% signals surprisingly strong economic growth and likely sustains the Fed’s view that the U.S. economy is avoiding recession. The Fed may delay rate cuts or take a more cautious approach, as stronger growth can support higher inflation or at least reduce the urgency for support.
Below Forecast or Negative:
Weak GDP—especially if close to zero or negative—would signal that the economy remains at risk of stagnation or recession. The Fed may then pivot to a more dovish stance, become more willing to cut rates, or accelerate discussions on easing to avoid a downturn.
3. Advance GDP Price Index q/q (Forecast: 2.3%, Previous: 3.8%)
Above Forecast:
A significantly higher-than-expected GDP Price Index (an inflation measure) points to persistent or resurgent inflationary pressures in the economy. The Fed might see this as a reason to delay cuts or maintain restrictive rates for longer.
Below Forecast:
If the Price Index prints well below 2.3%, it suggests that inflation is cooling faster than anticipated. This outcome could allow the Fed to move toward easing policy if other conditions warrant, as price stability is more clearly in hand.
Bottom Line Table: Data Surprises and Likely Fed Reaction
Data Surprise Fed Outlook/Action
All above forecast Hawkish bias, rate cuts delayed or on hold
All below forecast Dovish bias, higher chances of rate cut
Mixed Data-dependent, further confirmation needed
Summary:
The Fed’s interpretation hinges on how these figures compare to forecasts and to each other. Stronger growth, jobs, and inflation = less rush to cut; weaker numbers = lower rates sooner. If growth or jobs are especially weak or inflation falls sharply, expect more dovish Fed commentary and a greater likelihood of future easing. Conversely, if the data all surprise to the upside, hawkish (rate-hold) messaging is likely to persist.
The U.S. Dollar Index (DXY) is a financial benchmark that measures the value of the United States dollar relative to a basket of six major foreign currencies. It provides a weighted average reflecting the dollar's strength or weakness against these currencies. The DXY is widely used by traders, investors, and economists to gauge the overall performance and health of the U.S. dollar on the global stage.
Key Features of the DXY:
Currencies included and their weights:
Euro (EUR) – 57.6%
Japanese Yen (JPY) – 13.6%
British Pound (GBP) – 11.9%
Canadian Dollar (CAD) – 9.1%
Swedish Krona (SEK) – 4.2%
Swiss Franc (CHF) – 3.6%
It was established in 1973 after the collapse of the Bretton Woods system to serve as a dynamic measure of the dollar's value.
The index reflects changes in the exchange rates of these currencies versus the U.S. dollar, with a higher DXY indicating a stronger dollar.
The DXY influences global trade dynamics, commodity prices (like oil and gold), and financial markets.
It is calculated as a geometric mean of the exchange rates weighted by each currency's significance in U.S. trade.
#DXY
In essence, the DXY is a crucial tool to assess how the U.S. dollar is performing against its major trade partners’ currencies, helping market participants make informed decisions in foreign exchange and broader financial markets.
DXY bullish trend The market reaction indicates that the economy remains very strong, and there is no immediate need for the Fed or any central bank action. Powell emphasized that any potential rate cuts will depend on the upcoming data, especially the August reports. As a result, the DXY is expected to remain strong and could rise towards the 104.00–106.00 levels. A potential bearish reversal in the DXY would only be likely if there is significant economic deterioration or a clear shift in Fed policy expectations.
Fundamentals Support Dollar’s Potential Trend ReversalThe dollar appears to be reversing its direction on the 4-hour timeframe. The trendline has been broken and retested twice, but the dollar has held above it, signaling a potential shift in momentum.
Despite intense pressure from the White House on the Federal Reserve, the data is likely to prevent the Fed from cutting rates at the upcoming meeting and possibly at the one after that. A potential rate cut in September will largely depend on incoming inflation and labor market data.
The inflation impact of tariffs became more visible in the latest CPI report, but the effect is still relatively modest. This aligns with our theory that tariff-driven inflation will build gradually and persist over a longer period, rather than cause an immediate spike.
Meanwhile, the labor market has not shown clear signs of rapid weakening, so there is no strong case for a rate cut from that side either. The Financial Conditions Index also indicates that monetary policy remains on the accommodative side. Bloomberg financial conditions index is at highest level since March.
As markets increasingly recognize that no rate cuts are likely in the near term, and with the August 1 tariff deadline approaching amid potential rising risks of trade tensions between the U.S. and the EU, the dollar may gain further support. The U.S.–EU bond market spread also does not favor a stronger euro at the moment, adding to the dollar's upside potential.
In the short term, 98.10 and 98.53 are immediate support and resistance levels. If the dollar breaks above 98.53 again, upward momentum may strengthen and open the path toward the 100 level.
DXY has finally arrived at our final POI. What next?DXY has finally arrived at a point I marked out for you since. I called it out and I was called a madman.
We may experience some downwards pressure and it already started during the Asian session. We have to wait for further confirmation to know if it wants to continue the bullish movement or fall.
Let's be patient for now.
USD Dollar Index (DXY): Pushing Higher As Forecast!Welcome back to the Weekly Forex Forecast for the week of July 30 - Aug1
In this video, we will analyze the following FX market:
USD Index
In my last USD video, the forecast was for higher prices. Check the related links below to see that video forecast. It played out exactly as analyzed. The +FVG was used to push for higher prices. The FOMC decision to keep the rate unchanged only pushed it further along.
Enjoy!
May profits be upon you.
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Disclaimer:
I do not provide personal investment advice and I am not a qualified licensed investment advisor.
All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies.
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DXY with interest rates With interest rates remaining steady, the U.S. Dollar is currently moving in a bullish direction.
As shown in the chart, it seems likely that price will break the previous high and form a bullish Quasimodo (QM) pattern. The price may then reach the 50% Fibonacci level.
After that, we should wait and observe the market's reaction.
If price gets rejected from the 103 zone — especially if accompanied by a rate cut or bearish price action — we could see a sharp decline toward the 95 area.
This 95 zone also aligns with a key weekly Fibonacci support level on the Dollar Index.
As long as the Federal Reserve maintains its hawkish stance, the U.S. Dollar may continue its upward momentum. However, the 103–104 zone — which aligns with the 50% Fibonacci retracement and a significant supply area — could serve as a strong resistance.
If price gets rejected from this area and we simultaneously see signs of a rate cut or weakening U.S. economic data, a trend reversal and corrective phase could begin. In that case, lower targets around 95 or even 93 could become likely in the medium term.
good luck