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Bovespa — Brazil Equities
JSE Top 40 — South Africa Index
IPC Index — Mexico Market
Facts
- A Federal Reserve interest rate hike at the September Fed meeting is almost fully priced into futures contracts (approx. 89% market-implied probability).
- The situation in the debt market remains tense, with 30-year US Treasury yields remaining close to 20-year highs (5.35%).
- WTI crude oil prices are approaching May highs, while the RSI indicator signals overbought conditions (71.2).
Recommendation
- Position: Short (SELL) on USDIDX at market price (99.261).
- Target price (Take Profit, TP): 98.300
- Stop Loss (SL): 100.100
Figure 1: USDIDX (09.10.2025 – 14.09.2026)
Source: xStation5, 14.09.2026 (12:10)
Opinion
USDIDX has recently been supported by both rising expectations of Fed rate hikes and climbing energy commodity prices (alongside an accompanying shift away from risk among investors). Wednesday’s Federal Reserve meeting will decisively shape market conditions (and not only in FX). Given that a rate hike is currently priced in at nearly 90%, the move itself may not suffice to strengthen the US dollar. A relatively hawkish and – crucially – credible narrative is also required. If Warsh fails to convince markets once again, bets on further rate hikes could fall, exerting downward pressure on the American currency. An even greater risk lies in a potential pause in rate hikes, which – amidst the recent escalation of pressure from President Trump for looser monetary policy – could reignite concerns over the erosion of US institutional integrity. This might drive a further rise in US Treasury yields and fuel the so-called ‘debasement trade’, namely a move away from fiat currency towards alternatives with fixed (or near-fixed) supply, such as precious metals or Bitcoin. Any significant improvement in the Middle East situation that would lead to a drop in oil prices would also be unfavourable for the dollar. These prices have recently been pushed very high. Certain technical indicators, such as the RSI, suggest overbought conditions. Figure 2: OIL.WTI (25.02.2026 – 14.09.2026)
Source: xStation, 14.09.2026 Lower crude oil prices are unfavourable for the US dollar for two reasons. Firstly, a decline should prompt investors to turn towards riskier assets (including higher-beta currencies). Secondly, the United States is a net exporter of crude oil.
Methodology
The recommendation has been prepared based on a fundamental analysis of the balance of risks for the US dollar ahead of the upcoming Federal Reserve meeting, as well as a technical analysis of the USDIDX chart. The direction of the recommendation was established through an assessment of these risks. Take Profit and Stop Loss levels were determined using Fibonacci retracements (TP slightly above Fibo 38.2, which also serves as a key psychological level at 100; SL positioned between Fibo 78.6 and Fibo 100, TP2 slightly above Fibo 100, SL near Fibo 78.6).
