Fed on rate pause, US Dollar slides below 100.00 with more downside ahead?

Federal Reserve prices in a rate pause on June

While rates remained unchanged, this Federal Reserve pause is beginning to look more like a bridge to the next phase of policy rather than a hard stop. Core inflation has been drifting lower, and economic growth, while resilient, is showing signs of slowing. That gives the Fed room to start shifting its posture without sending shockwaves through markets.

From a trader's perspective, the absence of hawkish language combined with the Fed’s readiness to “adjust policy as appropriate” is being interpreted as a green light to start positioning for a dovish turn.

Dollar Thursday gap failed to hold, downside move resumes

U.S. Dollar gapped up at Thursday's open but was quickly invalidated and slide down as the pause is turning more dovish for the Dollar especially with looming rate cuts for 2025.

If the Dollar fails to hold this line, below 100 level, we might see further downside until 2025's All-Time Low.

Key levels to watch

A breakdown below 99.129 - 98.694 level could send the Dollar for renewed downside until we reach the 97.921 level. As of now, the 4-Hour Bearish Fair Value Gap is holding as a resistance. Unless we trade pass through it to the upside, Dollar still has a risk for a downside continuation.