just now
- Dollar slides into FOMC week as traders price a September cut and a potential easing path into year-end.
- Sticky CPI but softer producer inflation keeps real yields heavy; August CPI rose 0.4% m/m, 2.9% y/y, while PPI momentum eased.
- Near-term bearish USD bias below 97.80 on DXY, with 97.00 as the key pivot ahead of the Fed.
USD Narrative: “Cuts Are Coming - But How Fast?”
The U.S. dollar enters this FOMC week on the back foot. Positioning has rotated out of the greenback as markets lean into a first 25 bp cut in September and a series of trims into early 2026, a stance reinforced by a visibly softer labor backdrop and easing producer inflation. As rate-cut odds firm, Treasury yields have edged lower and the dollar has slipped to multi-week lows versus the euro and multi-month lows versus high-beta FX.
On inflation, headline CPI for August printed 0.4% m/m and 2.9% y/y, with core at 3.1% y/y - still above target but drifting in the right direction. PPI cooled on a trend basis, signaling weaker pipeline pressure. This mix - not too hot, not too cold - lets the Fed pivot without declaring victory on inflation. The result is a “dovish, but cautious” setup into Wednesday’s policy decision.
The consumer remains the swing factor. August retail sales land today and are expected to slow to around 0.2% m/m, a step down from mid-year resilience. A soft print would validate the easing path and keep the dollar heavy; a beat risks a “dovish-cut, hawkish-guidance” read that could spark a brief USD short-squeeze.
Why the Fed Is Cutting Rates This Week
The Fed’s basis for a September rate cut rests on three pillars:
- 1. Labor Market Weakness
- August nonfarm payrolls added just ~22k jobs, with unemployment climbing to 4.3%, the highest since late 2020.
- Job openings data (JOLTS) and revisions to earlier payrolls show a labor market losing steam, easing wage pressures and lowering inflation risk.
- 2. Inflation Convergence
- Headline CPI has slowed from 3.4% in June to 2.9% in August, and core inflation is following the same path.
- Producer prices (PPI) have softened, suggesting pipeline pressures are not feeding into consumer inflation as aggressively as before.
- 3. Financial Conditions & Growth Risks
- Equity markets are at all-time highs, but credit markets reflect a cautious outlook with flattening yields and rising stress in commercial real estate.
- Consumer spending, while resilient, is showing cracks - retail sales growth has slowed, and sentiment surveys point to weakening demand into Q4.
In short, the Fed is cutting rates not because inflation is fully defeated, but because the risk of overtightening now outweighs the risk of lingering price pressures. The cut is framed as insurance against stagnation, giving the Fed breathing room to adjust policy while keeping longer-term credibility intact.
Technical Outlook (DXY)
Before vs After Price Action
The Dollar Index (DXY) has respected the broader bearish structure, sliding from the blue supply/FVG zone (97.80–98.00) into the 97.20 region, confirming the earlier forecast of a rejection lower.
This shift validates the downside momentum ahead of the Fed decision but leaves room for tactical rebounds if buyers defend near-term liquidity pools.
Technical Outlook: DXY After Hitting the 97 Zone
The chart shows that the Dollar Index (DXY) has already tapped into the 97.20–97.10 liquidity pool, which we highlighted earlier as a key downside target. This reaction leaves two possible paths: either the level acts as a springboard for a corrective recovery rally, or sellers press further to break below 97.00 and extend the downtrend. The drawn projections illustrate these alternative outcomes - one pointing to a bounce toward 97.50–97.80, the other showing a continuation leg lower into fresh lows.
Bullish Scenario: Short-Term Recovery Rally
After sweeping 97.20–97.10, price could stabilize and stage a corrective bounce.
- Upside targets: 97.40–97.50 intraday resistance, followed by 97.70–97.80.
- Break and close above 97.80 unlocks 98.00–98.10, setting up a pre-FOMC squeeze.
- Invalidation: Failure to defend 97.00 negates the bullish case.
Bearish Scenario: Continuation Through Support
Sellers remain in control with lower-highs intact.
- Breakdown below 97.10/97.00 confirms continuation toward 96.80, with scope for 96.50 if dovish Fed tone persists.
- Intraday rallies into 97.40–97.50 may act as distribution zones before another leg lower.
- Invalidation: Daily close above 97.80 would weaken bearish momentum.
Start Practicing with Confidence - Risk-Free!
- Trade forex, indices, gold, and more
- Access ACY, MT4, MT5, & Copy Trading Platforms
- Practice with zero risk
It’s time to go from theory to execution - risk-free.
Create an Account. Start Your Free Demo!
Check Out My Contents:
Strategies That You Can Use
Looking for step-by-step approaches you can plug straight into the charts? Start here:
- How To Trade & Scalp Indices at the Open Using Smart Money Concepts (SMC)
- How to Trade Breakouts Effectively in Day Trading with Smart Money Concepts
- Complete Step-by-Step Guide to Day Trading Gold (XAU/USD) with Smart Money Concepts (SMC)
- The Power of Multi-Timeframe Analysis in Smart Money Concepts (SMC)
- Forex Trading Strategy for Beginners
- Mastering Candlestick Pattern Analysis with the SMC Strategy for Day Trading
- How to Use Fibonacci to Set Targets & Stops (Complete Guide)
- RSI Divergence Trading Strategy for Gold: How to Identify and Trade Trend Reversals
- Stochastics Trading Secrets: How to Time Entries in Trending Markets using Stochastics
- Gold Trading Stochastics Strategy: How to Trade Gold with 2R - 3R Targets
- RSI Hidden Divergence Explained: How to Spot Trend Continuations Like a Pro
- Moving Averages Trading Strategy Playbook
- Mastering Fibonacci Trading Psychology - Trusting the Levels, Managing the Mind
- Mastering Price Action at Key Levels - How to Spot, Trade, and Win at the Most Crucial Zones
- Mastering Retests: How to Enter with Confirmation After a Breakout
Indicators / Tools for Trading
Sharpen your edge with proven tools and frameworks:
- The Ultimate Guide to Risk Management in Trading - A Complete Compilation for 2025
- Moving Averages Trading Strategy Playbook
- How to Think Like a Price Action Trader
- Mastering Fibonacci Trading Psychology - Trusting the Levels, Managing the Mind
How To Trade News
News moves markets fast. Learn how to keep pace with SMC-based playbooks:
- Why Smart Money Concepts Work in News-Driven Markets - CPI, NFP, and More
- How to Trade NFP Using Smart Money Concepts (SMC)-A Proven Strategy for Forex Traders
- How to Trade CPI Like Smart Money - A Step-by-Step Guide Using SMC
Learn How to Trade US Indices
From NASDAQ opens to DAX trends, here’s how to approach indices like a pro:
- How to Start Trading Indices and Get into the Stock Market with Low Capital (2025 Guide)
- Best Indices to Trade for Day Traders | NASDAQ, S&P 500, DAX + Best Times to Trade Them
- How To Trade & Scalp Indices at the Open Using Smart Money Concepts (SMC)
- NAS100 - How to Trade the Nasdaq Like a Pro (Smart Money Edition)
How to Start Trading Gold
Gold remains one of the most traded assets - - here’s how to approach it with confidence:
- How to Swing Trade Gold (XAU/USD) Using Smart Money Concepts: A Simple Guide for Traders
- Complete Step-by-Step Guide to Day Trading Gold (XAU/USD) with Smart Money Concepts (SMC)
- The Ultimate Guide to Backtesting and Trading Gold (XAU/USD) Using Smart Money Concepts (SMC)
- Why Gold Remains the Ultimate Security in a Shifting World
- How to Exit & Take Profits in Trading Gold Like a Pro: Using RSI, Range Breakdowns, and MAs as Your Confluence
How to Trade Japanese Candlesticks
Candlesticks are the building blocks of price action. Master the most powerful ones:
- Mastering the Top Japanese Candlesticks: The Top 5 Candlesticks To Trade + Top SMC Candlestick Pattern
- How to Trade Candlestick Patterns with High Probability: A Complete Guide for Beginners
- The Top Japanese Candlestick Guide: What is an Engulfing Pattern and How to Trade It?
- Piercing Pattern Candlestick Explained: How to Trade It - Step-By-Step Guide
- Morning & Evening Star Candlestick Patterns - How to Trade Market Reversals with Confidence
How to Start Day Trading
Ready to go intraday? Here’s how to build consistency step by step:
- 5 Steps to Start Day Trading: A Strategic Guide for Beginners
- 8 Steps How to Start Forex Day Trading in 2025: A Beginner’s Step-by-Step Guide
- 3 Steps to Build a Trading Routine for Consistency and Discipline - Day Trading Edition
- The Ultimate Guide to Understanding Market Trends and Price Action
- Trading with Momentum: The Best Trading Session to Trade Forex, Gold and Indices
Learn how to navigate yourself in times of turmoil
Markets swing between calm and chaos. Learn to read risk-on vs risk-off like a pro:
- How to Identify Risk-On and Risk-Off Market Sentiment: A Complete Trader’s Guide
- How to Trade Risk-On and Risk-Off Sentiment - With Technical Confirmation
- The Ultimate Guide to Understanding Market Trends and Price Action
Want to learn how to trade like the Smart Money?
Step inside the playbook of institutional traders with SMC concepts explained:
- Why Smart Money Concepts Work: The Truth Behind Liquidity and Price Action
- Mastering the Market with Smart Money Concepts: 5 Strategic Approaches
- Understanding Liquidity Sweep: How Smart Money Trades Liquidity Zones in Forex, Gold, US Indices
- The SMC Playbook Series Part 1: What Moves the Markets? Key Drivers Behind Forex, Gold & Stock Indices
- The SMC Playbook Series Part 2: How to Spot Liquidity Pools in Trading-Internal vs External Liquidity Explained
- Fair Value Gaps Explained: How Smart Money Leaves Footprints in the Market
- Accumulation, Manipulation, Distribution: The Hidden Cycle That Runs Every Market
- Institutional Order Flow - Reading the Market Through the Eyes of the Big Players
- London Session Trading Secrets: How Smart Money Sets the High & Low of the Day
- Mastering the New York Session - Smart Money Concepts Guide
Master the World’s Most Popular Forex Pairs
Forex pairs aren’t created equal - - some are stable, some are volatile, others tied to commodities or sessions.
- The Top 5 All-Time Best Forex Pairs to Trade
- Top Forex Pairs Beyond the Big Five
- EUR/USD: The King of Forex
- USD/JPY: The Fast Mover
- GBP/USD: The Volatile Cable
- AUD/USD: The Commodity Currency
- USD/CAD: The Oil-Backed Pair
- GBP/JPY: How to Trade The Beast
- Asian & London Session Secrets
- Mastering the New York Session
Stop Hunting 101
If you’ve ever been stopped out right before the market reverses - - this is why:
- Stop Hunting 101: How Swing Highs and Lows Become Liquidity Traps
- Outsmarting Stop Hunts: The Psychology Behind the Trap
- How to Lessen Risk From Stop Hunts in Trading
- How Stop Hunts Trigger Revenge Trading - Breaking the Pain Cycle
- How to Accept Stop Hunts Without Losing Discipline - Shifting From Frustration to Focus
Trading Psychology
Mindset is the deciding factor between growth and blowups. Explore these essentials:
- The Mental Game of Execution - Debunking the Common Trading Psychology
- Managing Trading Losses: Why You Can Be Wrong and Still Win Big in Trading
- The Hidden Threat in Trading: How Performance Anxiety Sabotages Your Edge
- Why 90% of Retail Traders Fail Even with Profitable Trading Strategies
- Top 10 Habits Profitable Traders Follow Daily to Stay Consistent
- Top 10 Trading Rules of the Most Successful Traders
- Top 10 Ways to Prevent Emotional Trading and Stay Disciplined in the Markets
- Why Most Traders Fail - Trading Psychology & The Hidden Mental Game
- Emotional Awareness in Trading - Naming Your Triggers
- Discipline vs. Impulse in Trading - Step-by Step Guide How to Build Control
- Trading Journal & Reflection - The Trader’s Mirror
- Overcoming FOMO & Revenge Trading in Forex - Why Patience Pays
- Risk of Ruin in Trading - Respect the Math of Survival
- Identity-Based Trading: Become Your Trading System for Consistency
- Trading Psychology: Aligning Emotions with Your System
- Mastering Fear in Trading: Turn Doubt into a Protective Signal
- Mastering Greed in Trading: Turn Ambition into Controlled Growth
- Mastering Boredom in Trading: From Restless Clicking to Patient Precision
- Mastering Doubt in Trading: Building Confidence Through Backtesting and Pattern Recognition
- Mastering Impatience in Trading: Turn Patience Into Profit
- Mastering Frustration in Trading: Turning Losses Into Lessons
- Mastering Hope in Trading: Replacing Denial With Discipline
- When to Quit on Trading - Read This!
- The Math of Compounding in Trading
- Why Daily Wins Matter More Than Big Wins
- Scaling in Trading: When & How to Increase Lot Sizes
- Why Patience in Trading Fuels the Compounding Growth
- Step-by-Step Guide on How to Manage Losses for Compounding Growth
- The Daily Habits of Profitable Traders: Building Your Compounding Routine
- Trading Edge: Definition, Misconceptions & Casino Analogy
- Finding Your Edge: From Chaos to Clarity
Risk Management
The real edge in trading isn’t strategy - it’s how you protect your capital:
- Mastering Risk Management: Stop Loss, Take Profit, and Position Sizing
- Why Risk Management Is the Only Edge That Lasts
- How Much Should You Risk per Trade? (1%, 2%, or Less?)
- The Ultimate Risk Management Plan for Prop Firm Traders - Updated 2025
- Mastering Position Sizing: Automate or Calculate Your Risk Like a Pro
- Martingale Strategy in Trading: Compounding Power or Double-Edged Sword?
- How to Add to Winners Using Cost Averaging and Martingale Principle with Price Confirmation
Suggested Learning Path
If you’re not sure where to start, follow this roadmap:
- 1. Start with Trading Psychology → Build the mindset first.
- 2. Move into Risk Management → Learn how to protect capital.
- 3. Explore Strategies & Tools → Candlesticks, Fibonacci, MAs, Indicators.
- 4. Apply to Assets → Gold, Indices, Forex sessions.
- 5. Advance to Smart Money Concepts (SMC) → Learn how institutions trade.
- 6. Specialize → Stop Hunts, News Trading, Turmoil Navigation.
This way, you’ll grow from foundation → application → mastery, instead of jumping around randomly.
Follow me for more daily market insights!
Jasper Osita - LinkedIn - FXStreet - YouTube
This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplies by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.
