The US dollar index extended its winning streak to six consecutive sessions, trading near 99.70 during Asian hours on Wednesday. As the Federal Reserve's September rate decision approaches, market participants are repositioning around US inflation dynamics, energy prices, and the future monetary policy path, keeping the greenback in a firm short-term stance.

Last week's US inflation data came in hotter than expected, further cementing expectations that the Fed will continue its tightening campaign. Market consensus now points to a 25-basis-point hike in the benchmark overnight rate, bringing it to the 3.75% to 4.00% range. According to the CME FedWatch tool, the probability of a quarter-point hike is priced at roughly 92.4%, indicating that this policy move is largely baked into the market.

That said, the more critical element for traders is the Fed's guidance on the future policy trajectory rather than the hike itself. Should the policy statement and economic projections maintain a hawkish tilt, the dollar could find additional support. Conversely, if the market interprets this as the final leg of the tightening cycle, the currency may face profit-taking pressure in the near term.

Energy market developments are adding complexity to the policy calculus. After Saudi Arabia shut down a key oil pipeline that bypasses the Strait of Hormuz, international crude prices have climbed further. Sustained increases in energy costs could feed through to consumer prices via fuel, transportation, and production expenses, thereby intensifying inflationary pressures. If elevated oil prices persist longer than anticipated, the Fed may be compelled to maintain a tighter policy stance for an extended period, which would underpin the dollar.

Meanwhile, elevated US Treasury yields continue to enhance the appeal of dollar-denominated assets. With the rate hike already heavily priced in, the dollar's ability to push higher will largely hinge on whether the Fed, through its economic projections and policy guidance, raises market expectations for additional adjustments in October or December. Attention therefore shifts to Fed Chair Kevin Warsh's post-meeting press conference.

Investors will be scouring for clues on inflation, employment, growth, and the path for future rate adjustments. If Warsh emphasizes the inflationary risks from energy prices and signals that policy must remain restrictive, the dollar index is likely to sustain its elevated range. A more cautious tone, however, could trigger a short-term pullback in the greenback.

From a daily chart perspective, the dollar index is hovering near 99.70, trading above both the 50-period EMA and the 9-period EMA. The short-term moving averages remain in a bullish alignment, suggesting the recent rebound trend remains intact. The 14-day RSI sits at approximately 56, indicating momentum is firm but not yet overbought, leaving room for further upside toward higher levels.

On the downside, the first support to watch is the 50-day EMA near 99.64, which serves as the immediate dynamic support. Should the dollar index experience a technical pullback after the Fed decision, the ability to hold 99.64 will be a key gauge of short-term strength. Further down, the 9-day EMA near 99.35 acts as the next support zone; a break below this level would diminish the near-term bullish advantage built over the recent winning streak.

On the upside, the 99.70 to 100.00 region warrants close attention. The 99.70 level marks the current trading position, while 100.00 represents a significant psychological barrier. If the dollar index breaks and stabilizes above 100.00 on policy-driven momentum, market focus would shift toward previous highs. Failure to clear this level, however, could invite corrective pressure as traders lock in gains.

On the 4-hour chart, the dollar index maintains a gradual uptrend structure, with short-term moving averages providing support to price action. Volatility is likely to expand following the Fed announcement, with 99.64 and 99.35 forming the key support zone for bulls, while 100.00 stands as the critical psychological hurdle overhead. Short-term traders should closely monitor whether the policy statement and press conference alter market expectations for the subsequent rate path.

In summary, the dollar index has risen for six consecutive sessions, with expectations for a 25-basis-point Fed hike now heavily concentrated in the market. The true near-term variable lies in how the policy statement, economic projections, and press conference repricing shape the outlook for future rate moves. Elevated oil prices stoking inflation risks, Treasury yields, and monetary policy expectations will continue to collectively drive dollar dynamics. Technically, 99.64 and 99.35 are vital supports, while 100.00 remains the psychological level to watch in the next phase.