US Dollar: What Levels to Watch as Markets Head Into July

The first half of 2025 is officially coming to an end as markets wrap up the rest of June.

The beginning to this year has been defined by broad US Dollar selling, driven by the unwinding of US-centric flows that had built up over the past 15 years.

After a frantic six months under President Trump, market participants are increasingly looking to reduce exposure to the United States.

The key themes pressuring the US Dollar have included doubts over the sustainability of ballooning deficits, lower tax revenues to fill up the federal piggy bank, and—perhaps most importantly—the unpredictability of Trump’s tariff policy.

Several Questions Remain to Understand Macroeconomic Dynamics for the Dollar:

Are Tariffs Really Going to Be Implemented?

The deadline for tariff implementation is fast approaching, even as the US-UK Trade Deal is already in effect. With July 9th around the corner, traders are asking whether the market has already priced in the policy—or if more volatility lies ahead.

If Tariffs Are Enacted, Is the Market Prepared?

A well-priced scenario could trigger a classic “sell-the-news” move, possibly followed by renewed US Dollar strength. However, if traders still believe there’s room for a deal—or fear worse outcomes—there could be further repricing in FX markets, particularly in the Dollar’s broader trend.

Is the Market Still Holding Out Hope for Deals, or Bracing for Escalation?

That distinction matters. If optimism remains, any disappointment could spark another risk-off wave. If fear is already dominant, surprises could lean positive.

When Will the Fed Finally Cut Rates?

Markets are slowly leaning toward a July start to the Fed’s easing cycle, but pricing remains cautious. Until clarity emerges from data or Fed communication, uncertainty will linger—and that’s fuel for FX volatility.

Take a look at the Dollar Index charts from the Weekly to intra-day to explore what are the current pricing dynamics.

Dollar Index Technical Analysis from Weekly to 1H Charts

Dollar Index Weekly

Source: TradingView

The US Dollar had given up its strength quite largely throughout the year and has not managed to bounce at its 98.00 May-June consolidation, even amid war flows which gave some relative demand to the USD – demand that quickly faded as the Middle East tensions abated.

Prices are currently testing the 96.00 to 97.00 Immediate Weekly support that held the Dollar throughout 2019 to Mid-2020.

Expect some technical reactions as the Weekly RSI is right at the border of oversold territory and the Weekly 50 and 200 Moving Averages are about to form a Death-Cross.

The pricing of more cuts or potential slowdown give more probability for a breakdown – However a still strong and highly employed US workforce still gives ways for the FED to wait before cutting.

Thursday’s Non-Farm Payroll release will provide more clarity in that aspect.

Dollar Index Daily

Source: TradingView

Prices are still evolving within the Daily descending channel.

The last Weekly open gapped to wick on the 50-Day Moving Average with the Israel-Iran War leading right back into selling.

Sellers are still in control, however it seems that they will need a further reason to enter and break into the Weekly Support Zone mentioned above.

The low of the channel coincides with the Measured-Move target of the Daily Head and Shoulders pattern highlighted in the chart, at 96.50 – A level that is approaching fast.

Dollar Index 1H

Source: TradingView

The Greenback has been consolidating in a 40 pip range right at the 97.00 Handle – Expect the consolidation to continue as volatility typically abates in the week preceding the 4th of July.

Notwithstanding major geopolitical change, any breakout should be minimal until the NFP Release on Thursday at 8:30 A.M., expected at 110K.

Momentum is standing around Neutral and Hourly MAs are flattening – these are the levels you may want to keep on your Intra-Day Charts to spot Dollar strength:

• Current Low Consolidation Support 97.00 Zone
• Immediate Pivot 97.60 to 97.80 (coincides with Top of 2025 Downwards Channel)
• Intermediate Resistance 98.00 Zone (coincides with 1H MA 200)

Safe Trades for the Week Ahead!