DXY Forecast 2026-07-14: CPI Day, Hormuz Toll, Waller Trigger

By Ken Chigbo · Founder, KenMacro · 18+ years in markets, London trading floor and institutional FX

Find Ken on X @realkenchigbo · YouTube @Realkenchigbo · MACRO MASTERY Discord

Updated 2026-07-14 08:05 BST

The Macro Setup Behind the DXY Forecast

The dollar is not surging today, it is holding, and that is the more bullish tell. Monday’s blockade headline dragged DXY into 101.20 and the tape has refused to give any of it back. The 101.02 cap that got reclaimed on the surge has flipped to support, and consolidation on top of a breakout is how a trend refuels rather than tops. The engine under the move is the crude tape and the rate tape working together. Brent is at 84.72, up about 11% in two sessions after a 9.6% previous session, WTI is at 79.57 (+1.83%), and the US 10-year is at 4.61%, up from 4.54% on Friday.

The reason the oil move has teeth, and the reason the desk keeps hammering this point, is that it has been taxed. Trump has notified Congress of a new war against Iran, CENTCOM reinstates the naval blockade on Iranian vessels today at 21:00 BST, and a 20% toll now applies to all cargo transiting the Strait of Hormuz (which carries roughly 20% of the world’s traded oil and gas). A fear spike mean-reverts when the fear fades. A toll is a cost, and costs get passed through. The war is also widening: Saudi airstrikes hit Sanaa International Airport on Monday and the Houthis retaliated on Saudi Arabia’s Abha International Airport, with no casualties reported. The full live read on this decomposition is the kind of thing that drops daily inside the MACRO MASTERY desk.

The tape has already read it. A July 29 hike is now priced at about 43% on CME FedWatch (43.3% hike against 56.7% no change, zero for a cut). CNBC has quoted it as high as 46.5% intraday. Kalshi has it at 36%, up from under 20% on Sunday and under 10% earlier this month. Fed funds sit at 3.50 to 3.75%; a hike takes them to 3.75 to 4.00%. In two weeks a July hike has moved from a non-event to close to a coin flip, and Governor Waller has published the reaction function that anchors the move. In his 13 July speech, Waller said if there is another hot reading on core inflation, the FOMC “will need to consider tightening monetary policy in the near term”, and that he will not repeat “the mistake we made in 2021 by not responding sooner”. His exact phrasing: “Sternly staring at inflation until it melts before our withering gaze is not an option.” The honest read includes his caveats. He warned against “fighting the last war”, noted the labour market is far less tight than 2021, and that market-based inflation expectations remain anchored near 2%. He wants more data. The 2022 cycle taught the lesson the desk is applying now: when an energy shock drives the inflation impulse, the dollar catches its bid through the rate channel rather than the haven channel, and the backward-looking CPI print always lags the crude tape that is already setting the next one. That is the frame for our us dollar outlook into the second half of July.

Here is where most desks will get today wrong. Everyone will trade the headline, and the headline is the trap. June CPI lands at 13:30 BST with consensus at minus 0.1% m/m headline, cutting the annual rate from 4.2% to about 3.9%, the first decline in four months. That number is structurally blind. It is mechanically an energy base effect, because US pump prices fell about 10% in June, one of the largest monthly drops in a decade. June CPI measures June. It cannot see the blockade, it cannot see the toll, and it cannot see an 11% two-day move in Brent, because none of it had happened when the data was collected. The oil shock that matters lands in the July and August prints. So the read is core, expected at plus 0.2% m/m with the annual core steady at 2.9% and sticky. That is the number Waller told the market he is watching. Ninety minutes after the print, Fed Chair Kevin Warsh takes questions from the House Financial Services Committee at 15:00 BST on his debut semiannual testimony, and he cannot dodge it. For the mechanics of trading this specific release, our how to trade cpi walkthrough sets out the sequencing. The MACRO MASTERY desk covers CPI live as the print lands and Warsh’s tape unfolds.

Multi-Timeframe Read for the DXY Forecast

On the daily, DXY has printed a decisive reclaim of the 101.02 line, the 200-period moving average that had capped every rally through June. Monday’s session did not just poke through it, it closed above and this morning has refused to give it back at 101.20 (-0.03%). Structure on the daily is now a higher low against the 99.89 rising 50-period moving average and a higher high through 101.02, which is the definition of a trend reset rather than a mean-revert. The read is different from the June false break, which came without a fundamental catalyst; this one has an oil toll and a rate repricing under it.

The H4 tape is the cleaner picture. The 101.02 to 101.20 band is behaving like a supply-turned-demand shelf, which is exactly what a defended reclaim looks like on the four-hour. Consequently, the H4 read is a coiled range on top of the breakout, and coiled ranges on top of breakouts resolve in the direction of the underlying macro flow, which right now is up. By contrast, the intraday tape into CPI is thin and jumpy, with the euro at 1.1390 sitting near a one-year low and cable pinned exactly on the 1.3357 support. Both look like they are pre-positioned for a dollar-continuation outcome, which is worth noting because pre-positioned tape amplifies the reaction on a surprise in either direction. The desk’s line remains 101.02. Above it, the dollar keeps its trend structure. Lose it on a soft-core print and the intraday flush can be sharp, but 100.71 sits beneath as the next line and 99.89 is the deeper hold that keeps the medium-term uptrend intact.

Scenario Map for the DXY Forecast

Bull scenario (55%): a hot core extends the dollar

In the bull case, core lands at plus 0.3% or above, the annual core sticks at 2.9% or nudges higher, and Warsh in the 15:00 BST testimony refuses to close the door on a July hike. In this scenario, DXY tends to drift through 101.50 into the 101.80 extension as the tape drags July hike pricing toward a coin flip. The engine is straightforward: a hot core validates the Waller trigger, the market pulls forward its terminal-rate expectation, and 10-year yields extend from 4.61% toward the cycle highs. Confirmation is a close above the 101.50 swing-high band with core printing hot and Warsh sounding open. Invalidation is a rejection back through 101.02, which would say the reclaim did not stick.

Bear scenario (45%): a soft print buys a pause the oil tape undoes

In the bear case, headline lands at consensus or softer at minus 0.2%, core surprises soft at plus 0.1% m/m and 2.7% annual, and Warsh leans into the “more data” framing. In this scenario, DXY tends to slide back through 101.02 toward 100.71 as the July hike prices back below 30% and the euro reclaims 1.1400. However, the desk does not marry the fade, because the oil pass-through the June print cannot see is rebuilding the inflation trade in real time via the Hormuz toll. A close back below the 100.71 support would flip the near-term structure, but 99.89 is the deeper line that must hold. The fade lasts as long as the crude tape lets it, which the desk reads as days, not weeks.

The Desk’s Read on the DXY Forecast

The distillation of the DXY forecast into today’s CPI is this: read core, not headline, and watch 101.02. Above the line, structure is intact and the crude-plus-rate bid does the work. Below it, the market gets the fade it is pre-positioned for, but the oil pass-through the June data cannot see limits how far and how long the fade extends. Waller has given the market the reaction function and Warsh cannot dodge it ninety minutes later. That is a rare setup where the reaction path is publicly telegraphed. The MACRO MASTERY desk caught a clean read on this regime last week when the Kalshi print flipped through 30%, the framework is in the desk’s archive.

Final Takeaway

The dollar’s path of least resistance is up while crude is bid, the Hormuz toll is live, and hike risk is being dragged forward. The 101.02 line is the read; core, not headline, is the trigger; and Warsh’s ninety-minutes-later testimony is the confirmation layer. In practice, a soft headline paired with a hot core is the outcome the market is least prepared for, and the outcome the current pre-positioning suggests would move DXY hardest.

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