The US dollar index is under downward pressure. In the short term, beware of an oversold rebound after the Fed's expectations are fulfilled.
2025-09-17 10:49:53
The US dollar index (DXY) rebounded slightly to around 96.70 in early Asian trading on Wednesday, but overall it still lacked upward momentum. Market expectations of a Federal Reserve rate cut continued to ferment, and the US dollar remained under pressure.
According to the CME FedWatch tool, traders are almost 100% pricing in a 25 basis point rate cut, and some market participants even believe there is a possibility of a "beyond-expectations" large rate cut.
Investors' focus is not only on the interest rate cut itself, but also on the press conference of Federal Reserve Chairman Powell and the latest economic forecast (SEP) and dot plot. These signals will directly determine the market's judgment on the future policy path.
"The overall trading sentiment for the dollar is weak as investors await dovish messages from the Fed's voting record, the dot plot and the press conference," said Karl Schamotta, chief market strategist at Corpay .
On the geopolitical front, US President Trump said that Ukrainian President Zelensky must "reach a deal as soon as possible" to end the conflict, and urged EU and NATO countries to "stop buying Russian oil." This move has eased market concerns about energy supply to some extent.
On the daily chart, the key support level is around 96.50. If it falls below, it may further point to 96.20 or even 95.80. The upper resistance level is in the 97.00-97.20 range. If it breaks through, it may open up the upside to 97.60.
The RSI is hovering around 50, indicating a balance of forces between bulls and bears; the MACD maintains a slight bearish signal. The DXY remains below its 20-day moving average, indicating a weak trend. A reversal of this weakness is possible only if it stabilizes above 97.00.
Overall, the US dollar index remains under pressure in the short term, with the 96.50-97.00 range becoming a key market focus. If Powell sends a strongly dovish signal, the dollar could weaken again; if he unexpectedly takes a hawkish stance, it could trigger a brief rebound.
Editor's opinion:
Judging from the current trend of the US dollar index, the market has almost fully priced in the Fed's 25 basis point rate cut, and the short-term pressure on the dollar is within expectations. The real variables lie in the dot plot and Powell's wording. If the Fed hints at further rate cuts, the dollar could fall below the 96.50 support level, opening up further downside potential.
On the other hand, if the Federal Reserve releases a signal of "only a one-time interest rate cut", it may trigger a technical rebound of the US dollar, and the short-term target may return to above 97.20.
According to the CME FedWatch tool, traders are almost 100% pricing in a 25 basis point rate cut, and some market participants even believe there is a possibility of a "beyond-expectations" large rate cut.
Investors' focus is not only on the interest rate cut itself, but also on the press conference of Federal Reserve Chairman Powell and the latest economic forecast (SEP) and dot plot. These signals will directly determine the market's judgment on the future policy path.
"The overall trading sentiment for the dollar is weak as investors await dovish messages from the Fed's voting record, the dot plot and the press conference," said Karl Schamotta, chief market strategist at Corpay .
On the geopolitical front, US President Trump said that Ukrainian President Zelensky must "reach a deal as soon as possible" to end the conflict, and urged EU and NATO countries to "stop buying Russian oil." This move has eased market concerns about energy supply to some extent.
On the daily chart, the key support level is around 96.50. If it falls below, it may further point to 96.20 or even 95.80. The upper resistance level is in the 97.00-97.20 range. If it breaks through, it may open up the upside to 97.60.
The RSI is hovering around 50, indicating a balance of forces between bulls and bears; the MACD maintains a slight bearish signal. The DXY remains below its 20-day moving average, indicating a weak trend. A reversal of this weakness is possible only if it stabilizes above 97.00.
Overall, the US dollar index remains under pressure in the short term, with the 96.50-97.00 range becoming a key market focus. If Powell sends a strongly dovish signal, the dollar could weaken again; if he unexpectedly takes a hawkish stance, it could trigger a brief rebound.
Editor's opinion:
Judging from the current trend of the US dollar index, the market has almost fully priced in the Fed's 25 basis point rate cut, and the short-term pressure on the dollar is within expectations. The real variables lie in the dot plot and Powell's wording. If the Fed hints at further rate cuts, the dollar could fall below the 96.50 support level, opening up further downside potential.
On the other hand, if the Federal Reserve releases a signal of "only a one-time interest rate cut", it may trigger a technical rebound of the US dollar, and the short-term target may return to above 97.20.
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