The US Dollar Index is trading near 100.02 after being rejected from the 101.50 level, with markets pricing roughly 55% odds of a September Federal Reserve rate hike. Coordinated currency intervention by the US and Japan, along with falling oil prices, are pulling the dollar lower. A firmer dollar has repeatedly pressured gold and Bitcoin in 2026, and the current setup suggests that pressure isn't letting up.
Dollar rejection at 101.50
DXY topped at 110.176 in January 2025 and bottomed at 95.551 on January 27, 2026. The recent rejection at 101.50 — a level that aligns with the May 2025 swing high — has sent the index back toward the 100 handle. Key resistance now sits at 101.98 (May 2025 swing high), 101.14 (0.382 Fibonacci), and a zone between 100.30 and 100.60. On the downside, support is at 99.49, a confluence of a trendline and the June swing low, followed by 99.00 (0.236 Fibonacci).
Rate hike odds firm up
Markets are pricing a 25-basis-point September hike at 53% on Kalshi, similar to the CME FedWatch tool. That expectation got a boost from July's ISM Manufacturing PMI, which rose to 55.6 — its strongest since May 2022. Three FOMC members dissented in favor of a hike in July, when rates were held at 3.50%-3.75%. The dissenters signal internal pressure to tighten, even if the majority held steady.
Oil and intervention
Oil dropped around 5% after the US and Iran agreed to restart talks. That decline, combined with coordinated currency intervention by the US and Japan, is pulling the dollar lower in the short term. But the broader trend remains uncertain. Weekly RSI near 50 shows no clear momentum edge, while daily RSI at 38 suggests sellers control short-term momentum.
Bitcoin's dollar headwind
A firmer dollar has repeatedly pressured gold and Bitcoin in 2026. With DXY hovering near support but short-term momentum favoring sellers, the outlook for Bitcoin remains cautious. The next big tests come this week: ISM Services PMI on Wednesday and the July jobs report on Friday, August 7. Both could shift rate hike expectations and, by extension, the dollar's trajectory. For crypto traders, that means watching the greenback as much as the charts.
