The U.S. Dollar Index (DXY) is hovering near the significant 100 level, a mark that has historically served as a central pivot for trend reversals. After weakening steadily through most of 2025, the index is now consolidating tightly - a sign that a sharp directional move may be imminent.
Fed Minutes Reveal Deep Internal Split
Minutes from the October Federal Reserve meeting revealed unusually sharp divisions among policymakers:
- While the committee approved the latest rate cut, members remained split over whether economic conditions justify further easing.
- Some officials expressed concern over a cooling labour market, arguing for more accommodation.
- Others pushed back firmly, citing persistent inflation pressures, and indicated that no additional cuts may be necessary in 2025.
This policy divide has introduced fresh uncertainty into currency markets, heightening sensitivity to economic data releases.
High-Impact Data Cluster to Drive Direction Next
The dollar now faces a heavy macro lineup that could determine whether it breaks upward or extends its decline. Key data scheduled this week includes:
- Non-Farm Payrolls (NFP)
- Unemployment Rate
- Existing Home Sales
Traders are closely watching these numbers for confirmation on whether the U.S. economy is stabilizing or weakening further.
Technical Picture: Compression Before Expansion
The DXY chart shows a clear price compression pattern near a long-term support zone. Historically, such squeezes precede significant breakout moves.
Two possible scenarios are emerging:
- Upside Breakout: A bounce from the 100 zone could push the index toward higher resistance levels, signalling renewed dollar strength.
- Downside Breakdown: A close below this level may trigger a deeper correction, extending the downtrend that began earlier in the year.
With the Dollar Index sitting precisely at this inflection point, the next move is likely to be swift and decisive.
Easy & quick
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