Fed Rate Path: Uncertainty Fades, CME FedWatch Tool Signals Cut

Market uncertainty over the Federal Reserve’s next move is easing. According to the CME FedWatch Tool, the probability of at least a small rate cut at the September 17 FOMC meeting has climbed to 80.7%—up from 62.3% just a week ago. Bond yields remain steady: 10-year Treasury yields are at 4.253%, slightly below last week’s 4.320%, which is supporting the index at current levels.

Technical Analysis: Support and Resistance Levels

On the daily chart, USDX is trading below the descending channel resistance (range 100.00–95.00). Technical indicators remain constructive for the bulls: the EMA Alligator shows a wide band, and the Awesome Oscillator histogram is printing corrective bars above the zero line.

  • Resistance: 99.80, 101.60
  • Support: 97.60, 95.90
US Dollar Index: key support and resistanceUS Dollar Index: key support and resistance

USDX Trading Scenarios (Weekly Timeframe)

  • Main scenario (Sell Stop):
    Entry: 97.60
    Take Profit: 95.90
    Stop Loss: 98.60
    Time horizon: 7+ days
  • Alternative scenario (Buy Stop):
    Entry: 99.80
    Take Profit: 101.60
    Stop Loss: 99.00
  • Key levels to watch: 95.90, 97.60, 99.80, 101.60

Outlook

A break and close below 97.60 could accelerate bearish momentum, targeting 95.90 as the next major support. Alternatively, a decisive push above 99.80 would set the stage for a move toward 101.60. With political uncertainty receding and the odds of a Fed rate cut rising, volatility is likely to persist around key data releases and policy headlines. Stay alert to further shifts in Treasury yields and White House policy moves, as they could drive the next trend in USDX.