DXY H4 – Dollar Weakens Ahead of PPI Release

DXY H4 – Dollar Weakens Ahead of PPI Release | Is the Market Pricing in a Fed Pivot?
🌐 Macro & Fundamental Context
As we head into the New York session on June 12, the market’s attention shifts to one critical data point: the US PPI (Producer Price Index). Following the softer-than-expected CPI reading of 2.4% YoY (vs. 2.5% forecast), the Dollar Index (DXY) dropped sharply—signaling fading inflation pressure and reigniting rate cut expectations.

✅ Bearish Fundamentals Building for the USD:
CPI miss fuels Fed rate cut bets (currently ~65% chance for September per FedWatch Tool).

US Treasury yields are easing, reflecting the market’s pricing of a less aggressive Fed.

Risk assets rallying as capital flows rotate away from USD into gold, equities, and long-duration bonds.

If today’s PPI also comes in below forecast, it could confirm a deeper correction in DXY. Conversely, a surprise PPI upside might trigger a short-term pullback.

📉 Technical Analysis – H4 Timeframe
🔹 Overall Trend:
DXY is locked within a clearly defined descending channel, with a consistent Lower High – Lower Low structure holding since late May.

🔹 Key Technical Zones:
Short-term resistance: 98.548 – likely to act as a ceiling unless PPI surprises to the upside.

Immediate support: 97.966 – a break below opens the door toward the key support zone at 97.191, which aligns with previous FVG imbalance and multi-timeframe demand.

🔹 EMA Structure:
Price remains below all major EMAs (13 – 34 – 89 – 200), confirming persistent bearish pressure.

EMA13 is currently acting as dynamic resistance on H4, pressing down on price.

🧠 Market Sentiment & Flow Insight
Investors are rotating out of USD as inflation fears fade and Fed easing expectations increase.

Risk-on sentiment is returning, benefiting gold and stocks while weighing on DXY.

However, a hot PPI print could spook the market briefly, leading to a corrective bounce in the Dollar before the trend resumes.

🔍 Scenarios to Watch:
PPI comes in lower than expected:

DXY may retest 98.548 resistance and reject lower.

Next targets: 97.966 → 97.191

PPI surprises to the upside:

Technical bounce toward 98.5–98.8 possible.

But trend remains bearish unless price reclaims 99.2+ zone.

✅ Conclusion
DXY remains under pressure from both macro and technical angles. The PPI report will be the next catalyst that determines whether this is a short-term dip or the continuation of a broader USD downtrend.

🎯 Tactical view: Favour short positions on DXY if price bounces into resistance and PPI supports the disinflation narrative. Target: 97.1 and below.