The US dollar is breaking out just hours before a monumental Fed rate decision. Can dollar bulls hold the line, or will we see late longs punished as we approach today’s volatility?
Watch today’s video to see how I’m trading the DXY, EURUSD, GBPUSD, and XAUUSD.
US Dollar Index (DXY) Outlook
The DXY is rallying this week following the early July retest of a channel support from 2011. Monday’s rally was incredibly aggressive, and so far, dollar bulls aren’t backing down.
However, the DXY faces a significant resistance area at 99.35. Although the dollar index is above 99.35 going into today’s Fed rate decision, the question is, can bulls hold the line after today’s events?
That’s yet to be seen. How the DXY reacts at 99.35 in the next 24-48 hours should offer clues as to whether the dollar pulls back in early August or targets 100.80.
As discussed earlier in the week, 100.80 is a significant monthly resistance for the DXY dating back to early 2023. For now, all eyes are on the 99.35 region heading into today’s FOMC volatility.

EURUSD Outlook
EURUSD broke its March trend line this week at 1.1660. Bulls didn’t put up much of a fight during Monday’s retest, and now the euro finds itself trading below the 1.1585 key level.
However, the 1.1450 region should attract considerable buying pressure. It’s a key horizontal from June and also the bottom of a channel from the 1980s using a pre-euro basket of currencies.
For now, the EURUSD is range-bound between 1.1450 support and 1.1585 resistance. If the DXY fails at 99.35, we could see some relief for the euro.

GBPUSD Outlook
On July 14th, GBPUSD broke its 2025 trend line support. The pair retested the level between the 23rd and 24th, which I discussed at the time.
The July 24th candle was a bearish engulfing day, hinting at a potential GBPUSD top. Since then, sellers have been in control, pushing the pair below its 1.3380 support earlier this week.
GBPUSD tested 1.3380 as new resistance on Wednesday, just hours before today’s Fed rate decision.
Like EURUSD, the pound finds itself in a new range; in this case, support comes in at 1.3240 with resistance at 1.3380.

XAUUSD (Gold) Outlook
XAUUSD is setting up for what could be an attractive setup in August. In Tuesday’s video, I discussed how gold broke its May trend line this week. I also shared the two buy-side imbalances at $3,351 and $3,404.
Imbalances, or single prints in this case, often serve as “magnets”, given how quickly the market passed through the area. They can also act as support or resistance.
Considering this week’s breakdown and the recent strength of the US dollar, I’m only interested in gold shorts. However, last week’s long upper wick suggests we may get some relief for XAUUSD, possibly toward the $3,404 imbalance.
Currently, XAUUSD is testing its $3,285 support level as we approach Wednesday’s Fed rate decision. Time will tell if buyers hold the line here to force a short squeeze into levels like $3,351 and potentially $3,404 in August.
Key support for gold comes in at $3,285 and $3,250, with resistance being the May trend line.
