US Dollar Forecast: DXY Pulls Back From 101.80 Into Core PCE, but the Trend Is Intact
Last checked: 25 June 2026, 09:30 UK time. Educational only, not financial advice. Trading is leveraged and most retail accounts lose money.
The dollar is having a rest, and that is exactly what a healthy uptrend does. The US dollar index (DXY, the Dixie) ran all the way up to 101.80 on Wednesday, its highest in 13 months, before easing back toward 101.5 to 101.6 on profit-taking ahead of today’s big inflation print. Do not read the pullback as a top. Markets do not move in straight lines, especially not into a level as important as this one.
The macro: a pause at a major liquidity ceiling
That 101.80 print is not a random number. It lines up with the May 2025 peak and sits right at the top of the 52-week range (95.55 to 101.80), so it is a major area of liquidity and a logical place for the market to take some money off the table. The desk’s read is that this is a correction inside an uptrend, not a reversal: the most likely path is the Dixie carving a higher low here and using it as a launchpad to break 101.80 and run the next pocket of liquidity toward 102. We need to see pullbacks, profit-taking and corrections for a trend to be sustainable, and that is what this is.
The fuel behind the move is rate-hike repricing. The Fed held at 3.50% to 3.75% on 17 June, and CME now prices a 37.4% chance of a hike at the 29 July meeting against a 62.6% hold, with roughly a two-thirds chance of at least one hike by December. Today is the day that thesis gets tested. US core PCE, the Fed’s preferred inflation gauge, lands at 13:30 UK time (08:30 ET). Consensus looks for headline PCE at 4.1% year on year, up from 3.8% and the hottest since April 2023, driven largely by energy, with most desks (UBS, Bank of America) flagging it as the likely peak for the year. Core PCE is seen steady at 3.3% year on year and 0.37% on the month, up from 0.24%. A hot print keeps adding hike risk and the dollar bid; a clear miss is what lets the market price hold again and deepens this pullback.
The data does not stop today. US payrolls land on 2 July and CPI on 14 July into the 29 July decision. Every inflation and jobs print between now and then matters, because the market keeps adding hike risk rather than taking it away, and that is the cleanest reason the dollar has been bid.
Levels: the ceiling, the higher low and the breakout
| Direction | Level | Why it matters (confluence) |
|---|---|---|
| Resistance / target | 102.00 | Next pocket of liquidity above the range high if 101.80 breaks |
| Resistance | 101.80 | The 13-month high, the May 2025 peak and the top of the 52-week range; the ceiling to break |
| Spot | ~101.5-101.6 | Holding above 101.50 into core PCE, pulling back on profit-taking |
| Support | 101.00 | Round number and prior breakout; a higher low above here keeps the uptrend intact |
| What invalidates it | Soft PCE and a daily close below ~101.00 | Would deepen the correction and put the dollar in a bigger pullback |
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How the desk reads it
The base case is constructive: a normal profit-taking dip into a higher low, then continuation through 101.80 toward 102 while the hike story stays on. The dollar is the driver of the whole board, so when it pulls back like this you get the mirror image elsewhere, a relief bounce in EUR/USD and gold and a steadier cable, none of which change the bigger trend. But make room for the other side. The dollar is stretched after a hard run, and a soft core PCE that lets the market unwind July hike pricing could turn this breather into a deeper correction back toward 101.00 and below. The line in the sand is the higher-low structure: hold it and dips are buys, lose 101.00 on a close and the pullback has more in it. This is the desk read, cross-referenced across multiple live sources and stripped of the noise.
What changed since the last update
The dollar index has pulled back from a fresh 13-month high of 101.80 on profit-taking into core PCE, but the uptrend is intact: a higher low above 101.00 keeps a break of 101.80 and a run toward 102 the base case, with today’s inflation print the swing factor.
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FAQ
Why is the US dollar pulling back on 25 June 2026? The dollar index is easing from a 13-month high of 101.80 on normal profit-taking ahead of the core PCE inflation report. It is a pause inside an uptrend, not a reversal, while markets keep pricing a higher chance of a July Fed hike.
What are the key DXY levels now? Resistance is the 101.80 13-month high and then 102.00. Support is around 101.00, where a higher low keeps the uptrend intact. A daily close below 101.00 on a soft PCE would deepen the pullback.
What data could move the dollar next? Core PCE on 25 June, then non-farm payrolls on 2 July and CPI on 14 July are the key releases into the 29 July FOMC decision.
Confirmed facts: the DXY level and 101.80 13-month high, the core PCE consensus, the 37.4% July hike probability, the 3.50-3.75% target range and the data dates are sourced from market data providers, CME pricing, BEA and the release calendars. Market interpretation is the desk’s view and not a guarantee. Trading involves risk.
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