USD Technicals Strong but FOMC Dovish Risk Looms for Forex Pairs

The US dollar index (DXY) has strengthened to 103.50, showing bullish technical patterns across major forex pairs ahead of this week's FOMC meeting. EUR/USD remains under pressure at 1.0775, while GBP/USD struggles below 1.2600 resistance. USD/JPY has broken above 150.00, reaching three-month highs, as the Bank of Japan maintains its ultra-loose policy stance. AUD/USD faces headwinds at 0.6450, weighed down by concerns over Chinese economic growth. Technical indicators favor continued dollar strength, with the DXY above its 50 and 200-day moving averages. However, markets are pricing in a 65% probability of a dovish hold from the Fed, which could trigger a dollar reversal. Key levels to watch include EUR/USD support at 1.0750, GBP/USD resistance at 1.2650, and USD/JPY resistance at 150.80. Traders should prepare for potential volatility around Wednesday's FOMC statement and Chair Powell's press conference.