The dollar edges higher while markets ease ahead of the FOMC meeting and mega-cap earnings on Wednesday, as inflation continues to build in line with ongoing Hormuz disruptions.

From weekly highs, Nasdaq is down 1% while bitcoin and precious metals are down over 3%.

The Bank of Japan meeting earlier today reflected a cautious hold with a hawkish tilt, and a similar tone is expected from Powell, as markets begin to price in uncertainty around future Fed leadership.

DXY, US2Y, US5Y, US 10Y Government Bond Yields – Daily Time Frame

Source: Trading view

Following the Strait of Hormuz closure on February 28, 2026, inflation pressures have rippled across global markets through energy, logistics, and fertilizer costs, pushing US CPI toward 3.3%. Now in the second month of this disruption—one of the most significant energy shocks in modern history—markets are seeing continued support for US yields and the dollar ahead of Wednesday’s FOMC meeting.

This environment is capping gains across risk assets, including Bitcoin below the 80,000 mark, while supporting the dollar index as it moves back toward the 99 level. Concerns around AI monetization and upcoming mega-cap earnings are also contributing to a cautious tone in markets.

DXY Price Outlook: Monthly Time Frame – Log Scale

Source: Trading view

The DXY remains in an overall upward bias, currently consolidating below the 2023–2026 resistance level near 100.60. The index is caught between rising inflation expectations—driven by higher energy prices—and hopes that ceasefire negotiations could eventually ease these pressures.

Bullish Scenario

Price action suggests the potential formation of a double bottom from the base of the 2008–2026 channel, with a descending neckline capping upside attempts near 100.60.

A confirmed close above 100.60 could open the path toward 101.80 and 104.60, increasing downside pressure on major currencies and precious metals.

Bearish Scenario

A break below the 97 level would invalidate the double bottom structure, exposing the index to the 95 support range, aligned with the broader 2008–2026 uptrend.

This zone remains critical in defining the longer-term directional bias for the dollar and could reinforce a deeper drawdown, potentially reviving de-dollarization narratives and pushing the index back toward the 2021 lows near 89.

Bitcoin Price Outlook: Weekly Time Frame – Log Scale

Source: Trading view

From a weekly perspective, Bitcoin’s long-term bullish structure remains intact, supported by several converging factors:

• A rebound from the 60,000 psychological level and the 0.618 retracement of the 2022–2025 uptrend
• A breakout from the bearish wedge formed between November 2025 and January 2026
• Former 2020 highs now acting as support after turning from resistance
• A recovery from oversold conditions last seen in 2022, when Bitcoin traded near 15,000

The key bullish confirmation level has shifted to 80,000, aligning with the trendline and the parallel channel connecting higher highs and lows since February. A sustained break above this level could open the path toward 83,000 and 90,000 initially, followed by 97,000.

On the downside, a move back below 73,000—the channel midpoint—would reinforce a short-term bearish outlook toward 68,000. A close below 68,000 would extend drawdown risks toward 60,000, 56,000, and 48,000 before the broader bullish trend potentially resumes.

Written by Razan Hilal, CMT
Follow on X: @Rh_waves