DXY - The US Dollar Post-Fed Rate Cut

📦 Quick Overview

📊 Theme: Fed cuts, DXY structure, and near-term outlook

🧭 Macro Signal: Fed move priced in — market unfazed

📉 Technical View: Two possible corrective structures unfolding

📍 Key Zone: $95–$92 before next bullish leg

Market Response: Fed Cut Priced In, Dollar Muted

Following the Federal Reserve’s decision to cut interest rates, the market reaction — especially in the US Dollar — was muted and orderly.

That shouldn’t come as a surprise. The rate cut was heavily priced in, with the market assigning a near-certain probability leading into the announcement. As such, DXY’s immediate price action was limited, and no major breakout followed.

But now that the dust has settled, it’s time to reassess the technical structure.

DXY Technical Scenarios – What Price Is Telling Us

There are two primary scenarios I’m tracking for the US Dollar Index (DXY):

📉 Scenario 1: Completed Triangle Correction

Scenario 1 - Breakdown to lower level imminent.

In this scenario, we’ve completed a triangle correction. If this count holds, a break below $96.20 would serve as confirmation for a short trade setup — possibly targeting the $95 to $92 zone before the next larger wave resumes.

Key points:

• Barrier triangle structure with support at $96.30 / $96.20 level

• Breakdown of this level with strong momentum = high-conviction short

📉Scenario 2: Diagonal 5th Wave Completion

Scenario 2 - Anticipates more sideways price action before breakdown to lower levels.

Alternatively, the recent low post-Fed announcement may represent the end of a 5th wave diagonal, concluding Wave 3 of the broader decline which started back in February.

If true, we may now be in the early stages of a larger corrective phase, and price action could remain sideways or choppy until structure resolves.

This count would suggest:

• No immediate short setup

• Wait for corrective price action to take form

• Also requires break below $96.20 with strong momentum for high-conviction short

📍 My Current View

While the long-term trend for the dollar remains bullish, I’m expecting to see continued downward pressure in the short term, potentially toward the $95 to $92 region.

I’ll be watching:

• 🔑 $96.20 — break below this = short confirmation (scenario 1)

• ⚠️ Consolidation or retracement structure = short bias (scenario 2)

  
  

Final Word

The Fed rate cut has been absorbed with minimal volatility, and the US Dollar remains in a corrective phase. We may see a triangle breakdown or a larger correction unfold. This remains a "wait-for-structure" zone, not a "rush-into-position" moment for me.

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