Expectations for a 25 Basis Point Rate Hike Strengthen as Fed's Interest Rate Decision Approaches

DXY is trading sideways at its last close of 99.095, with a 24-hour change of nearly zero. The RSI is at 54, in neutral territory, while the MACD is slightly below its signal line (0.029 vs 0.036), indicating weak short-term momentum. The price is very close to the SMA20 (99.093), with the SMA50 (98.972) acting as support. Expectations of a 25 basis point Fed rate hike are strengthening, which is a positive catalyst for the dollar, but the market may have largely priced this in. Therefore, I expect a moderate upward move in the 1-3 day horizon, but the risk of a limited move is high.

The Fed's expected 25 basis point rate hike could suppress risk appetite and lead to short-term selling. However, with RSI at 51 in neutral territory and the price just above the SMA20, this indicates no oversold signal. MACD is in negative territory and below the signal line, momentum is weak. The 24-hour change is limited at -0.49%; the news may be priced in. Therefore, although there is a downward bias, confidence is low.

As expectations for a Fed rate hike strengthen, upward pressure on USDTRY may build. However, the latest close at 48.5121 is slightly below the 20- and 50-day moving averages, with RSI at 43.5 in the neutral-weak zone and MACD below its signal line. This outlook points to limited buying interest in the short term, but the rate hike expectation may already be priced in. In the 1-3 day horizon, the probability of an upward move is higher, but unless the 48.60-48.70 resistance zone is breached, the upside may remain limited.