The US Dollar Index (DXY) has entered a high-stakes consolidation phase as markets brace for the release of the on February 18, 2026. After a volatile start to the year, the Dollar index is currently hovering near the critical 97.00 psychological handle, leaving traders to wonder if the next move is a breakout toward 98.00 or a breakdown into the mid-95s.
The Fed’s Dissent: Waller and Miran in Focus
The January FOMC meeting saw interest rates held steady at 3.5%–3.75%, but the decision was far from unanimous. The 10-2 vote revealed a growing rift within the Committee. Governors Christopher Waller and Stephen Miran dissented in favor of an immediate 25-basis-point cut.
Investors will be scouring the minutes for any “dovish” clues regarding why these members felt the need to break rank. If the minutes reveal that more members are leaning toward the “Waller-Miran” camp, the DXY could face immediate downward pressure.
Economic Tone: “Moderate” to “Solid”
Despite the internal debate, Fed Chair Jerome Powell upgraded the economic assessment from “moderate” to “solid” during his last press conference. While the labor market is currently stabilized at 4.3%, Powell signaled a “wait and see” approach, emphasizing that the remains data-dependent and in no rush to ease further.
However, the looming “neutral rate” discussion is the real wildcard. If the minutes suggest that the Fed believes the neutral rate is higher than previously estimated, it would imply that rates won’t need to fall much further, providing a bullish tailwind for the dollar.
DXY Technical Analysis: Three Scenarios for Traders
The Dollar Index is currently trapped in a tight range. How the market digests the minutes will likely trigger one of the following three paths:
Scenario 1: The Hawkish Surprise (Bullish DXY) If the minutes emphasize “elevated inflation” and a “solid” economy without acknowledging the need for rapid cuts, we expect a move toward dollar strength.
Target: A break above 97.00 could quickly see a retest of 97.75 (previous support turned resistance).
Stretch Goal: A push toward the 98.00–98.20 zone.
Scenario 2: The Dovish Pivot (Bearish DXY)
Should the minutes highlight deepening concerns about the labor market or the potential for more than two cuts this year, the dollar will likely lose its footing.
Target: A break below 96.40 would open the door for a retest of the 96.00 psychological floor.
Stretch Goal: A decline toward the next major area of interest at 95.40.
Scenario 3: The “Nothing New” Consolidation (Neutral DXY)
If the minutes simply reiterate Powell’s press conference without adding fresh details on the dissent or fiscal policy (such as the “Stimulus Bill” impact), the DXY will likely remain stuck.
Outlook: Continued sideways trading between 96.80 and 97.50, waiting for the next major catalyst.
Bottom Line
The DXY is sitting at a “breaking point.” For trend followers, the path of least resistance has been lower over the long term, but the immediate counter-trend risk is a hawkish Fed pause. Traders should watch the 96.80 support and 97.75 resistance levels closely on Wednesday.
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