Dollar Bulls Lose Ground as Markets Reprice the Fed

Traders' Opinions

Summary:

DXY retreats toward 99.75 as softer CPI and PPI data reduce expectations for a September Fed hike. However, higher Oil prices and geopolitical risks could limit the Dollar's downside.

SELL USDX

EXP

PENDING

99.600

Entry Price

98.800

100.100

99.520 -0.270 -0.27%

Pips

PENDING

98.800

Exit Price

99.600

Entry Price

100.100

The US Dollar Index (DXY) extends its retreat on Friday, slipping around 0.2% toward the 99.75 area after reaching a two-week high in the previous session. Despite the pullback, the Greenback remains on course for a modest weekly gain as traders balance softer US inflation against persistent geopolitical and energy risks.

The main pressure on the Dollar comes from a further cooling in US inflation. July producer prices were unchanged on the month, below expectations, while annual PPI slowed to 4.7% from 5.5%. Combined with Wednesday's CPI report, which showed headline inflation easing to 3.4% and core inflation to 2.5%, the data have strengthened expectations that the Federal Reserve will leave interest rates unchanged in September. Markets are now assigning roughly a two-thirds probability to a September hold.

For now, the Dollar's near-term momentum has softened, but the broader picture remains mixed. Cooling inflation favors further downside in DXY, while geopolitical risk, elevated Oil prices and lingering expectations for another Fed hike could prevent a deeper decline.

Technical Analysis

The US Dollar Index (DXY) is showing a bearish setup on the daily chart, with the sharp rejection from the 101.40 resistance region shifting momentum decisively lower. The index has since broken beneath the 100.40 area and is now consolidating around 99.77, directly below the 99.85–99.95 resistance zone.

The current consolidation looks more like a bearish pause following the initial breakdown than the beginning of a meaningful recovery. Repeated attempts to reclaim 99.90 have struggled to attract follow-through, while the sequence of lower highs keeps sellers in control. This leaves DXY vulnerable to another leg lower once the present consolidation resolves.

On the downside, a clean break beneath the recent 99.25–99.30 lows would provide fresh confirmation of bearish continuation and expose the 98.75–98.85 support zone. This represents the next major technical objective and an area where buyers could attempt to stabilize the index. However, the projected structure suggests that even this support could eventually give way, opening the door toward the 98.00–98.10 region.

On the upside, the immediate invalidation area sits around 99.90–100.00. A sustained daily recovery above this zone would weaken the immediate bearish setup, while a stronger move through 100.40–100.50 would signal a more meaningful change in structure and could bring the 101.40 resistance region back into focus.

For now, the technical bias remains bearish, with rallies toward resistance more likely to attract selling pressure unless DXY can decisively reclaim the 100.00 handle.

TRADE RECOMMENDATION

SELL DXY

ENTRY PRICE: 99.60

STOP LOSS: 100.10

TAKE PROFIT: 98.80

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Risk Disclosure

The risk of loss in trading financial instruments such as stocks, FX, commodities, futures, bonds, ETFs and crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No decision to invest should be made without thoroughly conducting due diligence by yourself or consulting with your financial advisors. Our web content might not suit you since we don't know your financial conditions and investment needs. Our financial information might have latency or contain inaccuracy, so you should be fully responsible for any of your trading and investment decisions. The company will not be responsible for your capital loss.

Without getting permission from the website, you are not allowed to copy the website's graphics, texts, or trademarks. Intellectual property rights in the content or data incorporated into this website belong to its providers and exchange merchants.

Recent Searches

Top Searches

Markets

Analysis

User

24/7

Economic Calendar

Education

Data

Dollar Bulls Lose Ground as Markets Reprice the Fed

Technical Analysis

Risk Disclosure