Fed Cuts 25 bps, but Powell’s Tone Keeps Dollar Bulls in Control

Jasper Osita - Market Analyst

2025-11-04 11:16:12

US Dollar steadies near 100.00 after the Fed’s 25 bps cut, with Powell’s tone limiting dovish bets.
Markets had fully priced the cut, but Powell’s “December optional” guidance and ongoing data blackout from the government shutdown kept uncertainty—and the dollar—firm.
DXY defending the 99.70–99.90 Bullish FVG & Order Block, forming a solid base for a potential breakout toward 100.60 – 101.20.

Macro Narrative: Fed Cut Expected, Tone Surprised

Last week’s Federal Reserve rate cut (−25 bps to 3.75 %–4.00 %) was widely anticipated. Fed funds futures had priced in nearly 98 % odds of easing ahead of the decision.
But what markets didn’t price was Chair Jerome Powell’s tone.

Instead of confirming a dovish path, Powell told reporters that December’s meeting remains “optional” and that policy is “not on a preset course.”
He warned that incomplete inflation and labor data—delayed by the federal government shutdown—make forecasting difficult, describing policy-making as “driving through fog.”

This shift reframed expectations:

The cut was done, but the path ahead became uncertain.

Traders trimmed bets for a rapid easing cycle.

The dollar recovered as yields stabilized and shorts were forced to cover.

Powell’s Tone: Dovish Action, Hawkish Delivery

Powell balanced caution with confidence:

He acknowledged a softening manufacturing sector (ISM 48.7) and cooler job creation, yet

Stressed that inflation progress remains uneven, and

Rejected the notion of an automatic follow-up cut in December.

The result: a hawkish-dovish hybrid message.
While the Fed delivered easing, Powell’s rhetoric anchored expectations, boosting the US Dollar Index (DXY) off the 99.70 zone as markets priced fewer near-term cuts.

Shutdown Effects: Data Fog Keeps the Dollar in Focus

A major subplot now shaping USD sentiment is the ongoing U.S. government shutdown.
Its fiscal impasse has halted or delayed releases from agencies such as the Bureau of Labor Statistics (BLS) and the Bureau of Economic Analysis (BEA)—potentially postponing:

Non-Farm Payrolls (NFP) – previously slated for Nov 8, may be delayed.

Consumer Price Index (CPI) – tentatively Nov 15, could slip if BEA operations remain limited.

Core PCE Inflation and Retail Sales – risk of further postponements.

These delays mean the Fed will face weeks of missing visibility before its December meeting.
For markets, that uncertainty acts as a supportive floor for the USD, since traders hesitate to sell dollars aggressively when the data compass is broken.

In effect, the shutdown functions like a volatility dampener for risk assets and a stability anchor for the dollar: less clarity → tighter spreads → safe-haven demand.

Recent Red-Folder Events

Date	Event	Actual	Forecast	Impact
Oct 29	FOMC Rate Decision	−25 bps	−25 bps	High – Fed cut as priced in
Nov 3	ISM Manufacturing PMI	48.7	49.4	Negative – Growth softens
Nov 6 (est.)	ISM Services PMI	TBD	53.0	Pending — Could shift USD bias
Nov 8 (est.)	NFP Release	At risk of delay	–	Data blackout risk ↑

Technical Outlook – DXY (4H Chart)

Structure & Context

The DXY 4-hour chart shows price consolidating just above a Bullish Fair Value Gap (FVG) and Bullish Order Block (OB) within the 99.60 – 99.90 zone.
This area represents the institutional demand base formed post-FOMC, confirming that large players accumulated positions around the same levels that coincide with Powell’s press conference.

Narrative of Price Action

The FOMC drop on Oct 29 was retraced and absorbed inside the OB.

Price then produced a clean higher low and reclaimed 99.90, signaling a re-accumulation phase.

The latest 4H candle expansion toward 100.00 – 100.10 aligns with renewed buying interest as volatility contracts around support.

Bullish Scenario – Continuation Through 100.60

Price remains supported above 99.70 (FVG floor).

A 4H or daily close above 100.60 confirms bullish continuation.
Targets: 101.20 → 101.70 (previous FOMC pivot highs).
Catalysts: Delayed NFP → uncertainty premium; Fed’s cautious tone; continued risk-off sentiment.

Bearish Scenario – Rejection and Break Below 99.60

Breakdown through the Bullish Order Block invalidates short-term bullish structure.

Targets: 98.80 → 98.30 (liquidity zones).
Triggers: Shutdown resolution + soft data releases resuming (showing rapid disinflation).

Upcoming USD Catalysts

Nov 6: ISM Services PMI
Nov 8: Non-Farm Payrolls (at risk of delay)
Nov 15: CPI (tentative, subject to BEA clearance)
Mid-Nov: Powell remarks & FOMC Minutes – could clarify December’s path

If the shutdown persists, the absence of new data will make markets trade almost exclusively on risk sentiment and yield spreads — both currently favor the USD.

Start Practicing with Confidence - Risk-Free!

Trade forex, indices, gold, and more
Access ACY, MT4, MT5, & Copy Trading Platforms
Practice with zero risk

It’s time to go from theory to execution - risk-free.

Create an Account. Start Your Free Demo!

Check Out My Contents:

Strategies That You Can Use

Looking for step-by-step approaches you can plug straight into the charts? Start here:

Indicators / Tools for Trading

Sharpen your edge with proven tools and frameworks:

How To Trade News

News moves markets fast. Learn how to keep pace with SMC-based playbooks:

Learn How to Trade US Indices

From NASDAQ opens to DAX trends, here’s how to approach indices like a pro:

How to Start Trading Gold

Gold remains one of the most traded assets - here’s how to approach it with confidence:

How to Trade Japanese Candlesticks

Candlesticks are the building blocks of price action. Master the most powerful ones:

How to Start Day Trading

Ready to go intraday? Here’s how to build consistency step by step:

Swing Trading 101

Learn how to navigate yourself in times of turmoil

Markets swing between calm and chaos. Learn to read risk-on vs risk-off like a pro:

Want to learn how to trade like the Smart Money?

Step inside the playbook of institutional traders with SMC concepts explained:

Master the World’s Most Popular Forex Pairs

Forex pairs aren’t created equal - some are stable, some are volatile, others tied to commodities or sessions.

Metals Trading

Stop Hunting 101

If you’ve ever been stopped out right before the market reverses - this is why:

Trading Psychology

Mindset is the deciding factor between growth and blowups. Explore these essentials:

Market Drivers

Risk Management

The real edge in trading isn’t strategy - it’s how you protect your capital:

Suggested Learning Path

If you’re not sure where to start, follow this roadmap:

Start with Trading Psychology → Build the mindset first.
Move into Risk Management → Learn how to protect capital.
Explore Strategies & Tools → Candlesticks, Fibonacci, MAs, Indicators.
Apply to Assets → Gold, Indices, Forex sessions.
Advance to Smart Money Concepts (SMC) → Learn how institutions trade.
Specialize → Stop Hunts, News Trading, Turmoil Navigation.

This way, you’ll grow from foundation → application → mastery, instead of jumping around randomly.

Follow me for more daily market insights!

Jasper Osita - LinkedIn - FXStreet - YouTube

This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplies by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.

作者

Jasper has been in the markets since 2019 trading currencies, indices and commodities like Gold. His approach in the market is heavily accompanied by technical analysis and of course, supported by fundamentals. He has a background in trading proprietary firms and has been teaching students how to navigate themselves in the markets from basic to advance concepts.