With the Federal Reserve's interest rate decision approaching and uncertainty surrounding inflation and GDP data, the US dollar index remained range-bound.
2026-04-29 13:21:36
On Wednesday during Asian trading hours, the US dollar index (DXY) hovered around 98.65 , showing overall stability, with market sentiment leaning towards caution. The market's core focus is currently on the upcoming Federal Reserve interest rate decision, with investors widely expecting the federal funds rate to remain unchanged in the 3.50%-3.75% range, implying that the Fed will continue its wait-and-see policy approach.
From a market perspective, the current dollar trend is primarily driven by two main factors. Firstly, inflationary pressures have not fully subsided, especially given the upward pressure on energy prices due to geopolitical factors. Market concerns that price stickiness may allow the Federal Reserve to maintain high interest rates for an extended period are supporting the dollar. Secondly, the market is assessing the uncertainties surrounding the future policy transition, including the approaching end of Chairman Powell's term and the uncertainty surrounding potential policy successors, which has increased market caution to some extent.
The market is paying close attention to Powell's remarks at the press conference, particularly his assessment of the persistence of inflation and the resilience of the economy. If the Fed continues to emphasize that "inflation remains sticky" or maintains a hawkish tone, the dollar index may gain further upward momentum; conversely, if the tone becomes more cautious or hints at future easing, it could trigger a temporary pullback in the dollar.
Meanwhile, the market will also be watching the performance of subsequent economic data. The upcoming preliminary Q1 GDP figures and the Personal Consumption Expenditures (PCE) price index in the United States will be crucial indicators for assessing economic momentum and inflation trends. If GDP performance falls short of expectations, coupled with easing inflationary pressures, it could weaken the foundation of a strong dollar, thus putting downward pressure on the dollar index.
From a market structure perspective, the US dollar is currently in a state of equilibrium driven by both policy and data. On the one hand, high interest rates provide a floor for the dollar; on the other hand, uncertainty surrounding economic data limits its further upside potential. This structure keeps the dollar index in a consolidation phase in the short term, awaiting new catalysts to break the equilibrium.
From a technical perspective, the US dollar index maintains a high-level consolidation structure on the daily chart, trading within the 97.80-99.20 range. The overall trend remains bullish, but momentum has slowed. Currently, 98.50 forms short-term support, while 99.20 is a key resistance level. A decisive break above this range could open up further upside potential towards the 100.00 psychological level. Looking at momentum indicators, the RSI is in the neutral-to-strong zone, suggesting that bulls still have the upper hand but lack acceleration momentum, indicating the market has entered a consolidation phase.
From a 4-hour chart perspective, the US dollar index is exhibiting a narrow range-bound structure, fluctuating around 98.60 , with the short-term direction unclear. Resistance is concentrated in the 98.90-99.20 area, while support lies at 98.40 and 98.00 levels. The current candlestick pattern shows a small-bodied consolidation formation, indicating that the market is compressing its trading range ahead of a major event, awaiting a breakout signal.
Editor's Summary <br/>Overall, the US dollar index is currently in a typical oscillating structure of "policy expectation-driven + data-driven waiting period". The Fed's continued high interest rates provide basic support for the dollar, but the market is more focused on future policy paths and changes in economic data. In the short term, the dollar index is likely to remain range-bound, with its direction depending on Powell's speech and subsequent GDP and PCE data. If policy is hawkish and the data is resilient, the dollar is expected to break out of its upward range; conversely, it may enter a period of correction.
From a market perspective, the current dollar trend is primarily driven by two main factors. Firstly, inflationary pressures have not fully subsided, especially given the upward pressure on energy prices due to geopolitical factors. Market concerns that price stickiness may allow the Federal Reserve to maintain high interest rates for an extended period are supporting the dollar. Secondly, the market is assessing the uncertainties surrounding the future policy transition, including the approaching end of Chairman Powell's term and the uncertainty surrounding potential policy successors, which has increased market caution to some extent.
The market is paying close attention to Powell's remarks at the press conference, particularly his assessment of the persistence of inflation and the resilience of the economy. If the Fed continues to emphasize that "inflation remains sticky" or maintains a hawkish tone, the dollar index may gain further upward momentum; conversely, if the tone becomes more cautious or hints at future easing, it could trigger a temporary pullback in the dollar.
Meanwhile, the market will also be watching the performance of subsequent economic data. The upcoming preliminary Q1 GDP figures and the Personal Consumption Expenditures (PCE) price index in the United States will be crucial indicators for assessing economic momentum and inflation trends. If GDP performance falls short of expectations, coupled with easing inflationary pressures, it could weaken the foundation of a strong dollar, thus putting downward pressure on the dollar index.
From a market structure perspective, the US dollar is currently in a state of equilibrium driven by both policy and data. On the one hand, high interest rates provide a floor for the dollar; on the other hand, uncertainty surrounding economic data limits its further upside potential. This structure keeps the dollar index in a consolidation phase in the short term, awaiting new catalysts to break the equilibrium.
From a technical perspective, the US dollar index maintains a high-level consolidation structure on the daily chart, trading within the 97.80-99.20 range. The overall trend remains bullish, but momentum has slowed. Currently, 98.50 forms short-term support, while 99.20 is a key resistance level. A decisive break above this range could open up further upside potential towards the 100.00 psychological level. Looking at momentum indicators, the RSI is in the neutral-to-strong zone, suggesting that bulls still have the upper hand but lack acceleration momentum, indicating the market has entered a consolidation phase.
From a 4-hour chart perspective, the US dollar index is exhibiting a narrow range-bound structure, fluctuating around 98.60 , with the short-term direction unclear. Resistance is concentrated in the 98.90-99.20 area, while support lies at 98.40 and 98.00 levels. The current candlestick pattern shows a small-bodied consolidation formation, indicating that the market is compressing its trading range ahead of a major event, awaiting a breakout signal.
Editor's Summary <br/>Overall, the US dollar index is currently in a typical oscillating structure of "policy expectation-driven + data-driven waiting period". The Fed's continued high interest rates provide basic support for the dollar, but the market is more focused on future policy paths and changes in economic data. In the short term, the dollar index is likely to remain range-bound, with its direction depending on Powell's speech and subsequent GDP and PCE data. If policy is hawkish and the data is resilient, the dollar is expected to break out of its upward range; conversely, it may enter a period of correction.
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