The dollar heads into a pivotal week trading near 101.80, just below a 15-month high, with the Fed’s July 29 meeting as the main focus. Markets are currently pricing roughly a 65% chance that the Federal Reserve will hold rates steady, although renewed escalation in the Middle East has kept the possibility of a hike later this year in view. Energy prices remain a key variable: the collapse of the Iran ceasefire and blockades affecting Persian Gulf shipping lanes have pushed oil higher, reviving inflation concerns that could complicate the Fed’s message.

Uncertainty has also been reinforced by recent labor data. According to ADP, private-sector hiring has slowed for a fourth consecutive week, while jobless claims fell to a two-month low, leaving the labor picture mixed. Fed Chair Kevin Warsh’s Congressional testimony did not provide clear direction, as he reiterated the central bank’s commitment to price stability without revealing the committee’s next move.

With the ECB decision now behind markets and flash PMI data already absorbed, Wednesday’s Fed decision has become the week’s defining catalyst. For currency traders, that matters because the dollar’s sensitivity to the Fed still shapes broader global pricing, from imported inflation to cross-asset positioning. The outcome could either resolve or extend the dollar’s recent indecision.

Technical Analysis of the DXY

The coming week also carries notable technical importance, with the DXY trading in a tightly contested range between 100.00 and 102.00. The Federal Reserve’s rate decision, and the volatility that may follow, could shape the dollar’s direction over the near to medium term.

Bullish Scenario

After a weak start to 2026, the DXY rebounded strongly from January’s 96-97 support zone, gaining about 6% since then. The index recently broke above the psychological 100.00 level and has held there, with support from both an ascending trendline and the 50-period EMA. A confirmed move above 102.00 would open the way toward 103-104, and later 106-107.

Bearish Scenario

The index is now facing resistance near 102.00. If that level rejects price and the ascending trendline is broken while the longer-term descending trendline from 2025 highs remains intact, the DXY could retest the critical 100.00 area. A deeper decline could bring 96-97 back into view as support.

With the Fed decision only days away, the dollar is positioned at a clear inflection point. Whether the DXY pushes to new highs or slips back toward earlier weakness, this week’s outcome is likely to influence not only the greenback but also other assets priced against it heading into autumn.