US Dollar Index (DXY) drops sharply after Fed decision, marking a major turning point in the currency market trend. Following the latest policy announcement from the U.S. Federal Reserve, the U.S. dollar weakened significantly, triggering notable reactions across major currency pairs such as EUR/USD, GBP/USD, USD/JPY, and AUD/USD. Current technical signals suggest the market is preparing for a new phase of volatility with clearer directional bias.
The fact that the US Dollar Index (DXY) drops sharply after Fed is reshaping short-term momentum across all USD-related pairs. Let’s take a look at the technical outlook for each major pair as of May 26, 2025:
US Dollar Index (DXY)
- Current Price: 98.82
- Trend: Bearish continuation confirmed after breaking below the psychological 100.00 level.
- Support Levels: 98.50, 98.00
- Resistance Levels: 99.50, 100.00
Traders who shorted around 101.79 are likely holding positions, with stops moved to near breakeven. If any correction occurs, 100.00–100.50 may act as a near-term ceiling.
EUR/USD
- Current Price: 1.1399
- Trend: Bullish, consolidating above 1.1300 with eyes on higher swing highs.
- Support Levels: 1.1300, 1.1185, 1.1000
- Resistance Levels: 1.1500, 1.1580
EUR/USD has broken the 1.1300–1.1360 range and is now testing 1.1400. If momentum continues, a push toward 1.1500 is likely. However, a pullback to 1.1300 remains possible and may offer a re-entry for bulls.
GBP/USD
- Current Price: 1.3584
- Trend: Bullish continuation after breaking above 1.3450
- Support Levels: 1.3450, 1.3330, 1.3300
- Resistance Levels: 1.3600, 1.4000
GBP/USD has printed a higher swing high and remains well-supported. Traders may look for long entries on a retest of 1.3450, targeting 1.3600 in the short term and 1.4000 over the medium term if momentum holds.
USD/JPY
- Current Price: 142.69
- Trend: Bearish continuation after trendline break
- Support Levels: 142.00, 140.00, 138.00
- Resistance Levels: 145.00, 149.20, 150.00
USD/JPY has turned lower decisively, printing lower swing lows. A corrective rally toward 145.00 could present short opportunities. Watch for bearish confirmation near that level.
AUD/USD
- Current Price: 0.6530
- Trend: Bullish, near breakout of consolidation zone
- Support Levels: 0.6350, 0.6250, 0.6000
- Resistance Levels: 0.6500, 0.6700
AUD/USD closed near the upper edge of a previous consolidation (green box). Bulls may look to add on dips, while a break above 0.6550 could confirm upside toward 0.6700.
The event that the US Dollar Index (DXY) drops sharply after the Fed has sparked decisive moves across major forex pairs. With USD weakness prevailing, technical setups on EUR/USD, GBP/USD, USD/JPY, and AUD/USD point toward continued trend opportunities. Traders should monitor key price zones for entries and risk management as volatility increases in the days ahead.
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