Dollar Index, Battle for 100...Fed's September Rate Hike Possibility at 55%

▲ Dollar (USD)

The U.S. Dollar Index (DXY) is struggling to find direction around the 100 mark. The Federal Reserve's (Fed) hawkish stance and joint market intervention by the U.S. and Japan are clashing.

According to cryptocurrency specialized media BeInCrypto on August 4 (local time), the U.S. Dollar Index was around 100.02 on the 4th. After a sharp drop from 101.50 last week, it continued its struggle to reclaim the psychological barrier of 100. The market-reflected probability of a Fed rate hike in September increased to approximately 55%.

The U.S. Institute for Supply Management (ISM) Manufacturing Purchasing Managers' Index (PMI) for July recorded 55.6, the highest level since May 2022. Although the Fed kept the benchmark interest rate unchanged at 3.50% to 3.75% in July, three members of the Federal Open Market Committee (FOMC) advocated for a rate hike. Kalshi reflected a 53% probability of a 0.25 percentage point increase in September.

Factors preventing the dollar's rise also emerged. The U.S. and Japan confirmed joint intervention after the yen's value fell to around 164 yen per dollar. International oil prices fell by approximately 5% on Monday after the U.S. and Iran agreed to resume negotiations. BeInCrypto analyzed that the strong dollar acted as a continuous downward pressure on gold and Bitcoin (BTC) in 2026.

The Dollar Index peaked at 110.176 in January 2025 and then fell to 95.551 by January 27, 2026. The subsequent rebound stopped around 101.50 in July. The weekly Relative Strength Index (RSI) remained around 50, and the daily RSI recorded 38. Short-term selling pressure is dominant, but it has not entered the oversold zone.

The 100.30 to 100.60 range is a key resistance level that the Dollar Index needs to overcome. If daily trading closes above 100.60, the Fibonacci 38.2% retracement line at 101.14 and the May 2025 high of 101.977 are the next resistance levels. Conversely, if 99.49 breaks, the Fibonacci 23.6% retracement line at 99.008 is presented as the lower support level. The ISM Services Purchasing Managers' Index on August 5 and the U.S. July Employment Report on August 7 remain as key upcoming events.

[Article Key Summary]

-The U.S. Dollar Index continued its battle around the psychological barrier of 100, near 100.02.

-The probability of a Fed rate hike in September increased to approximately 55%, but joint intervention in the yen by the U.S. and Japan limited the dollar's rise.

-The key resistance level for the Dollar Index is 100.60, and the key support level is 99.49.

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