Price Action + Fundamentals Point to Dollar StrengthThe current market environment presents compelling evidence for a bullish move in the US Dollar Index (DXY). While some patience is required, the setup is increasingly favorable for the dollar to appreciate in the coming weeks and months.
Key Factors Supporting a Bullish Move:
Monthly Close Above 100.160:
A critical technical level to monitor is the monthly close above 100.160. If achieved, it would signal a strong bullish breakout, setting the stage for a continuation higher. Given current price action and market dynamics, this scenario looks highly probable. However, if the price fails to close above 100.160 and instead breaks below it, we could potentially start looking for short opportunities.
Bond Market Strength (30Y, 10Y, 5Y):
This past week, we witnessed notable strength across the US bond market. Yields declined as prices rose, typically a positive signal for the dollar as it reflects capital inflows into US assets.
COT Report Insights:
The Commitment of Traders (COT) report reveals a critical shift: commercial traders, often considered the "smart money," are beginning to accumulate long positions in the dollar. This change in positioning historically precedes significant bullish moves.
Seasonal Patterns:
Seasonality also favors the dollar during this period. Historically, the dollar tends to strengthen in the mid-year months, aligning perfectly with the current technical and fundamental landscape.
Targets:
Initial Target: 106.120
Given the accumulation signs and supportive macro backdrop, a move towards 106.120 seems very realistic.
Dollarindex
DXY "Dollar Index" Market Bullish Heist Plan (Day or Swing)🌟Hi! Hola! Ola! Bonjour! Hallo! Marhaba!🌟
Dear Money Makers & Robbers, 🤑 💰💸✈️
Based on 🔥Thief Trading style technical and fundamental analysis🔥, here is our master plan to heist the DXY "Dollar Index" Market. Please adhere to the strategy I've outlined in the chart, which emphasizes long entry. Our aim is the high-risk ATR Line. Risky level, overbought market, consolidation, trend reversal, trap at the level where traders and bearish robbers are stronger. 🏆💸"Take profit and treat yourself, traders. You deserve it!💪🏆🎉
Entry 📈 : "The heist is on! Wait for the MA breakout (99.900) then make your move - Bullish profits await!"
however I advise to Place Buy stop orders above the Moving average (or) Place buy limit orders within a 15 or 30 minute timeframe most recent or swing, low or high level for Pullback entries.
📌I strongly advise you to set an "alert (Alarm)" on your chart so you can see when the breakout entry occurs.
Stop Loss 🛑: "🔊 Yo, listen up! 🗣️ If you're lookin' to get in on a buy stop order, don't even think about settin' that stop loss till after the breakout 🚀. You feel me? Now, if you're smart, you'll place that stop loss where I told you to 📍, but if you're a rebel, you can put it wherever you like 🤪 - just don't say I didn't warn you ⚠️. You're playin' with fire 🔥, and it's your risk, not mine 👊."
📍 Thief SL placed at the nearest/swing low level Using the 1H timeframe (98.900) Day / Swing trade basis.
📍 SL is based on your risk of the trade, lot size and how many multiple orders you have to take.
🏴☠️Target 🎯: 101.400 (or) Escape Before the Target
🧲Scalpers, take note 👀 : only scalp on the Long side. If you have a lot of money, you can go straight away; if not, you can join swing traders and carry out the robbery plan. Use trailing SL to safeguard your money 💰.
💰💵💸DXY "Dollar Index" Market Heist Plan (Swing/Day Trade) is currently experiencing a Bullish trend.., driven by several key factors.☝☝☝
📰🗞️Get & Read the Fundamental, Macro, COT Report, Geopolitical and News Analysis, Sentimental Outlook, Intermarket Analysis, Index-Specific Analysis, Future trend targets with Overall outlook score... go ahead to check 👉👉👉🔗🔗
⚠️Trading Alert : News Releases and Position Management 📰 🗞️ 🚫🚏
As a reminder, news releases can have a significant impact on market prices and volatility. To minimize potential losses and protect your running positions,
we recommend the following:
Avoid taking new trades during news releases
Use trailing stop-loss orders to protect your running positions and lock in profits
💖Supporting our robbery plan 💥Hit the Boost Button💥 will enable us to effortlessly make and steal money 💰💵. Boost the strength of our robbery team. Every day in this market make money with ease by using the Thief Trading Style.🏆💪🤝❤️🎉🚀
I'll see you soon with another heist plan, so stay tuned 🤑🐱👤🤗🤩
DXY BEARISH BIAS|SHORT|
✅DXY is trading in a downtrend
And the index is making a local
Bullish correction so after the
Resistance is hit around 100.500
We will be expecting a local
Bearish correction
SHORT🔥
✅Like and subscribe to never miss a new idea!✅
Disclosure: I am part of Trade Nation's Influencer program and receive a monthly fee for using their TradingView charts in my analysis.
DXY Bearish Pennant Breakdown | More Downside Ahead?The U.S. Dollar Index (DXY) has broken down from a well-defined bearish pennant pattern on the 4H chart, signaling continuation of the prevailing downtrend.
🔹 Technical Setup:
Pattern: Bearish Pennant
Breakdown Level: Below 99.00
Target: ~94.50 based on pennant pole projection
Confirmation: Clear follow-through after breakdown, low volume consolidation
🔹 Fundamentals:
Weak U.S. economic data and dovish Fed expectations continue to weigh on the dollar.
Rising gold and commodity prices further support DXY downside.
📌 Outlook: As long as DXY trades below 99.00 resistance, bearish momentum is likely to extend toward the 94.50 target zone.
NOTE: This is not financial advice. Trade at your own risk. Always do your own research.
2025 – The Year of the Normalized Dollar (Part Two)📉💵 2025 – The Year of the Normalized Dollar: Part Two 🔄🔥
Part 1:
As we kick off the week on April 21st, we find gold hitting historic highs of $3,400 while the U.S. Dollar Index (DXY) continues to slide — down 1.42% and firmly below the psychological 100 level. 📉 The breakdown at 99.3 confirms what we mapped out months ago.
Back in February, I highlighted the rejection at the 107.5 level and predicted that 2025 would mark The Year of the Normalized Dollar. That vision is unfolding exactly as drawn.
🔍 Technical Breakdown Recap
Rejection Zone: 107.5
Mid Support Breached: 100.95
Breakdown Level: 99.3
Next Target Range: 94.6–93.7 🧭
The visuals attached here are not new drawings — this is the same framework from my February 25th analysis, and it's playing out beautifully. 📊 The DXY is on a structural path toward normalization, aligning with macro policy shifts.
🗣️ Policy Catalyst
The dollar’s weakness isn’t just technical — it’s political and economic. Trump’s continued pressure on the Fed to slash interest rates, combined with tariff talk and geopolitical realignment, is creating a push toward a weaker but more "normalized" dollar.
From the Executive Order remarks on Jan 23, 2025:
“I'd like to see interest rates come down a lot. When oil comes down, prices come down — and then no inflation.”
These aren't just words — they're shaping market expectations and price action.
💬 Is this the soft landing the Fed is hoping for? Or the beginning of something bigger for DXY bears?
Drop your thoughts below and let’s keep the conversation rolling.
🎯 Charts attached for reference.
📢 Follow for more macro breakdowns & chart-focused insights.
One Love,
The FXPROFESSOR 💙
2025 – The Year of the Normalized Dollar📉💵 2025 – The Year of the Normalized Dollar! 🔥
The U.S. Dollar Index (DXY) is showing clear signs of weakness after breaching key support levels. With interest rate cuts on the horizon and a shift in economic policy, we may be entering a new phase for the dollar’s normalization.
🔍 Key Levels to Watch
🔹 Resistance: 107.5 (Immediate resistance)
🔹 Key Mid Support: 100.95 (Next major level)
🔹 Final Target: 94.8 (Major support & potential bottom)
📰 Fundamental Factors Driving the Move
💡 Trump’s Dollar Policy: Historically, Trump has favored a weaker dollar to boost exports. His recent remarks during the Executive Order signing on January 23, 2025, reinforce this stance, as he pushes for interest rate cuts and lower energy costs.
Remarks by President Trump at Executive Order Signing (January 23, 2025):
Q: Mr. President, you said earlier that you would like to see interest rates come down.
THE PRESIDENT: Yeah.
Q: How much would you like to see them come down?
THE PRESIDENT: A lot.
Q: And will you talk with Powell?
THE PRESIDENT: I’d like to see them come down a lot, and oil prices will come down. And when oil prices come down, everything is going to be cheaper for the American people — and actually for the world — but for the American people. So, I’d like to see oil prices come down.
Q: Are you worried that there’s too much going on at once if you’re trying to bring interest rates down and get the economy back going?
THE PRESIDENT: No, no. It just works that way. I mean, it just economically works that way. When the oil comes down, it’ll bring down prices, then you won’t have inflation, and then the interest rates will come down.
Q: You said that you would demand that the interest rates come down. Do you expect the Fed to listen to you?
THE PRESIDENT: Yeah.
📉 What’s Next for the Dollar?
🔸 If 100.95 breaks, we could see further downside, testing the 94.8 region.
🔸 A retest of resistance at 107.5 would be a key test before further declines.
🔸 The global macro environment (oil prices, inflation, and geopolitical shifts) will heavily influence the dollar’s trajectory.
🌍 Economic & Geopolitical Impact
Beyond monetary policy, Trump’s trade and labor policies are also playing a role in shaping the inflation outlook. His push for tariffs and tighter immigration policies has led to higher labor costs, causing short-term inflation. However, on the global stage, Trump's potential deal with Putin to resolve the Ukraine conflict could help ease inflation worldwide by stabilizing supply chains and reducing geopolitical risks.
With Trump pushing for rate cuts, the Fed under pressure, and DXY losing momentum, could we see a full-scale dollar correction in 2025? Let’s discuss! ⏬
📢 Follow for more macro insights & market analysis!
One Love,
The FXPROFESSOR 💙
DXY 4H Chart AnalysisThe U.S. Dollar Index is currently consolidating near the 99.400 level, within a broader bearish trend. Price is sitting just above key H4 support (~99.000), making this a critical decision zone.
Bullish scenario: Rejection from 99.000 could lead to a retracement towards 100.000, and potentially 102.500 if momentum holds.
Bearish scenario: A break below 99.000 would confirm further downside, possibly targeting 97.500 and beyond.
Traders should wait for clear price action confirmation before committing to a direction.
Dollar index (DXY) Analysis DXY Analysis – General Outlook
This week’s analysis is more of a general overview, and it closely aligns with my view on EUR/USD. While I don’t trade DXY directly, I use it heavily as a confluence tool, so marking out its likely direction is key for aligning trades across other USD-related pairs.
At the moment, I’m favouring Scenario A, where I expect DXY to move a bit lower, accumulate, and then react from the 2-day demand zone. If that happens, we could see a bullish move on DXY, which would naturally result in bearish pressure for other pairs like EU and GU.
However, if price decides to retrace upwards first, there’s a clean supply zone that still needs to be mitigated. If that zone holds, DXY could continue its bearish structure for longer—meaning more bullish momentum across other major pairs.
DXY / Dollar Index Market Heist Plan (Scalping/Day)🌟Hi! Hola! Ola! Bonjour! Hallo! Marhaba!🌟
Dear Money Makers & Robbers, 🤑 💰💸✈️
Based on 🔥Thief Trading style technical and fundamental analysis🔥, here is our master plan to heist the DXY / Dollar Index Market. Please adhere to the strategy I've outlined in the chart, which emphasizes long entry. Our aim is the high-risk ATR Zone. Risky level, overbought market, consolidation, trend reversal, trap at the level where traders and bearish robbers are stronger. 🏆💸"Take profit and treat yourself, traders. You deserve it!💪🏆🎉
Entry 📈 : "The heist is on! Wait for the MA breakout (103.300) then make your move - Bullish profits await!"
however I advise to Place Buy stop orders above the Moving average (or) Place buy limit orders within a 15 or 30 minute timeframe most recent or swing, low or high level.
📌I strongly advise you to set an "alert (Alarm)" on your chart so you can see when the breakout entry occurs.
Stop Loss 🛑: "🔊 Yo, listen up! 🗣️ If you're lookin' to get in on a buy stop order, don't even think about settin' that stop loss till after the breakout 🚀. You feel me? Now, if you're smart, you'll place that stop loss where I told you to 📍, but if you're a rebel, you can put it wherever you like 🤪 - just don't say I didn't warn you ⚠️. You're playin' with fire 🔥, and it's your risk, not mine 👊."
📍 Thief SL placed at the recent/swing low level Using the 1H timeframe (101.700) Day / Scalping trade basis.
📍 SL is based on your risk of the trade, lot size and how many multiple orders you have to take.
🏴☠️Target 🎯: 105.000 (or) Escape Before the Target
💰💸💵DXY / Dollar Index Market Heist Plan (Scalping / Day Trade) is currently experiencing a bullishness,., driven by several key factors.👇👇👇
📰🗞️Get & Read the Fundamental, Macro, COT Report, Quantitative Analysis, Sentimental Outlook, Intermarket Analysis, Future trend targets..., go ahead to check 👉👉👉🔗
⚠️Trading Alert : News Releases and Position Management 📰 🗞️ 🚫🚏
As a reminder, news releases can have a significant impact on market prices and volatility. To minimize potential losses and protect your running positions,
we recommend the following:
Avoid taking new trades during news releases
Use trailing stop-loss orders to protect your running positions and lock in profits
💖Supporting our robbery plan 💥Hit the Boost Button💥 will enable us to effortlessly make and steal money 💰💵. Boost the strength of our robbery team. Every day in this market make money with ease by using the Thief Trading Style.🏆💪🤝❤️🎉🚀
I'll see you soon with another heist plan, so stay tuned 🤑🐱👤🤗🤩
DXY / Dollar Index Market Heist Plan (Scalping / Day Trade)🌟Hi! Hola! Ola! Bonjour! Hallo! Marhaba!🌟
Dear Money Makers & Robbers, 🤑 💰💸✈️
Based on 🔥Thief Trading style technical and fundamental analysis🔥, here is our master plan to heist the DXY / Dollar Index Market. Please adhere to the strategy I've outlined in the chart, which emphasizes long entry. Our aim is the high-risk Red Zone. Risky level, overbought market, consolidation, trend reversal, trap at the level where traders and bearish robbers are stronger. 🏆💸"Take profit and treat yourself, traders. You deserve it!💪🏆🎉
Entry 📈 : "The heist is on! Wait for the MA breakout (104.550) then make your move - Bullish profits await!"
however I advise to Place Buy stop orders above the Moving average (or) Place buy limit orders within a 15 or 30 minute timeframe most recent or swing, low or high level.
📌I strongly advise you to set an alert on your chart so you can see when the breakout entry occurs.
Stop Loss 🛑:
Thief SL placed at the recent/swing low level Using the 1H timeframe (103.800) Day trade basis.
SL is based on your risk of the trade, lot size and how many multiple orders you have to take.
🏴☠️Target 🎯: 105.400 (or) Escape Before the Target
🧲Scalpers, take note 👀 : only scalp on the Long side. If you have a lot of money, you can go straight away; if not, you can join swing traders and carry out the robbery plan. Use trailing SL to safeguard your money 💰.
DXY / Dollar Index Market Heist Plan (Scalping / Day Trade) is currently experiencing a bullishness,., driven by several key factors.
📰🗞️Get & Read the Fundamental, Macro, COT Report, Quantitative Analysis, Sentimental Outlook, Intermarket Analysis, Index-Specific Analysis, Positioning and future trend targets.. go ahead to check 👉👉👉
⚠️Trading Alert : News Releases and Position Management 📰 🗞️ 🚫🚏
As a reminder, news releases can have a significant impact on market prices and volatility. To minimize potential losses and protect your running positions,
we recommend the following:
Avoid taking new trades during news releases
Use trailing stop-loss orders to protect your running positions and lock in profits
💖Supporting our robbery plan 💥Hit the Boost Button💥 will enable us to effortlessly make and steal money 💰💵. Boost the strength of our robbery team. Every day in this market make money with ease by using the Thief Trading Style.🏆💪🤝❤️🎉🚀
I'll see you soon with another heist plan, so stay tuned 🤑🐱👤🤗🤩
DXY The Fake Dance- One of the most important barometers for global currencies and markets in the world.
- Most of the time DXY is a well used machine to supress markets (forex, stocks, cryptos, etc..)
- When they don't start the printing machine, DXY keeps is strength.
- When they start to print DXY starts to dip and markets boom up.
- it's really basic and based on "BRRR Machine".
- i had a hard time to decrypt this fake peace of resilience.
- actually there's none visible divergences on the 1M or 3M Timeframes.
- So i decided to push my analysis to 6M Timeframe and noticed few things :
- You can notice that from 2008 ( Post crises ), DXY was in a perma bullish trend.
- So now check MACD and will notice this fake move on January 2021 ( in graph the red ? )
- MACD was about to cross down, columns smaller and smaller, then a Pump from nowhere lol.
- i rarely saw that in my trading life on a 6M Timeframe.
- So to understand more this trend, i used ADX (Average Directional Index)
- ADX is used to determine when the price is trending strongly.
- In many cases, it is the ultimate trend indicator.
- So if you look well ADX columns, you will notice that a strong divergence is on the way.
- First check the Yellow Doted Line in July 2022 when DXY reached 115ish and look the size of the green columns.
- Now check today (red doted Line), and look again the ADX green columns is higher, but DXY diped to 105ish.
- So like always, i can be wrong, but i bet on a fast DXY dip soon or later.
- it's possible to fake pumps, but it's harder to fake traders.
Happy Tr4Ding !
GOLD v DXY in breakout move --- HVF hunt volatility funnelAlways good to measure against the DXY not just the USD value
Not perfect of course as it is mainly the Euro and Yen but still insightful.
Been watching the relationship for a while
currently breaking out to the upside
HVF theory means this should be a violent expansion
Target 1 coming up.
Euro Stablecoin BOOMS: Bye, USD?The Euro Stablecoin Ascends: EURC Hits Record High as Traders Eye Dollar Alternatives Amid Global Uncertainty
For years, the digital asset landscape has been dominated by the US dollar, not just in trading volume but fundamentally through the ubiquity of USD-pegged stablecoins. Tokens like Tether (USDT) and Circle's own USD Coin (USDC) have become the bedrock of the crypto economy, acting as crucial bridges between volatile cryptocurrencies and traditional fiat, facilitating trading, lending, and yield generation within decentralized finance (DeFi). However, the winds of change may be subtly shifting. Amidst a backdrop of persistent global trade tensions, geopolitical maneuvering, and questions surrounding the long-term trajectory of the US dollar, alternative fiat-backed stablecoins are gaining traction. Leading this nascent charge is the Euro Coin (EURC), Circle's Euro-backed offering, which recently surged to a record market capitalization exceeding $246 million.
This milestone, while still dwarfed by its multi-billion dollar USD counterparts, is significant. It signals a growing appetite among traders, investors, and institutions for stable digital assets pegged to currencies other than the greenback. The rise of EURC isn't happening in a vacuum; it reflects a confluence of factors challenging the dollar's undisputed reign in the digital sphere and highlighting the strategic appeal of diversification.
Understanding the Stablecoin Status Quo and the Dollar's Dominance
Stablecoins are indispensable cogs in the crypto machine. They offer price stability relative to a specific asset (usually a major fiat currency), allowing market participants to park funds, calculate profits, pay for services, and interact with DeFi protocols without the wild price swings characteristic of Bitcoin or Ethereum. USDT and USDC have achieved massive network effects, integrated across countless exchanges, wallets, and DeFi applications, making them the default choice for liquidity and settlement.
Their success, however, inherently ties a vast swathe of the digital economy to the US dollar's fate and US monetary policy. For international users, particularly those operating primarily within the Eurozone or holding significant Euro-denominated assets or liabilities, relying solely on USD stablecoins introduces foreign exchange (FX) risk and potential conversion inefficiencies.
Enter EURC: A Regulated Euro On-Chain
Launched by Circle, the same regulated fintech firm behind the highly successful USDC, Euro Coin (EURC) aims to replicate the trust and utility of its dollar sibling, but pegged 1:1 to the Euro. Each EURC token is intended to be fully backed by Euros held in dedicated, segregated bank accounts under Circle's custody. This emphasis on transparency and regulatory compliance, mirroring the approach taken with USDC, is crucial for building trust, especially among institutional players wary of less transparent stablecoin issuers.
The recent surge in EURC's supply to over €246 million (equivalent to ~$246 million at the time of the record, assuming near parity for simplicity, though the exact USD value fluctuates) indicates accelerating adoption. This growth isn't just passive accumulation; it suggests active minting driven by real demand.
Why the Shift? Trade Uncertainty and the Allure of Diversification
The primary catalyst cited for this growing interest in non-USD stablecoins is the pervasive sense of uncertainty clouding the global trade environment and the US dollar's outlook. Several factors contribute to this:
1. Geopolitical Tensions & Deglobalization Trends: Ongoing conflicts, shifting alliances, and a move towards regional trading blocs can create volatility and potentially weaken dominant currencies like the dollar as nations explore alternative payment and reserve systems.
2. US Economic Concerns: Debates around US national debt levels, inflation trajectory, and the Federal Reserve's monetary policy decisions can lead some international investors and traders to hedge against potential dollar depreciation.
3. Desire for FX Hedging: Businesses and traders operating significantly within the Eurozone may prefer a Euro-native stablecoin to minimize the costs and risks associated with constantly converting between EUR and USD stablecoins. Holding EURC directly aligns their digital cash position with their operational currency.
4. European Regulatory Clarity (MiCA): The implementation of the Markets in Crypto-Assets (MiCA) regulation in the European Union provides a clearer framework for stablecoin issuers and users within the bloc, potentially boosting confidence in well-regulated Euro stablecoins like EURC.
5. DeFi Diversification: As the DeFi ecosystem matures, users are seeking more diverse collateral types and trading pairs. EURC allows for the creation of Euro-based liquidity pools and lending markets, catering to a specific user base and reducing systemic reliance on USD assets.
Traders aren't necessarily predicting an imminent dollar collapse, but rather strategically positioning themselves to mitigate risk. Holding a portion of their stable digital assets in EURC provides a hedge – if the dollar weakens against the Euro, the value of their EURC holdings, when measured in dollars, would increase, offsetting potential losses on USD-denominated assets.
Use Cases and Potential Beyond Hedging
While hedging FX risk is a significant driver, the utility of EURC extends further:
• Seamless Euro Transactions: Facilitates frictionless payments and settlements within the Eurozone using blockchain technology.
• European DeFi Growth: Enables the development of DeFi applications tailored to the European market, offering Euro-based borrowing, lending, and yield opportunities.
• Remittances: Potentially offers a more efficient channel for cross-border Euro transfers compared to traditional banking rails.
• Trading Pairs: Allows exchanges to offer direct EURC trading pairs against various cryptocurrencies, simplifying the process for Euro-based traders.
Challenges and the Road Ahead
Despite its record supply, EURC faces hurdles. Its market capitalization and liquidity remain a fraction of USDT's and USDC's. This lower liquidity can mean higher slippage on large trades and limits its immediate utility as deep collateral in major DeFi protocols, which thrive on multi-billion dollar liquidity pools. Building the network effect – getting listed on more exchanges, integrated into more wallets, and accepted by more DeFi platforms – takes time and concerted effort.
Furthermore, EURC's success is intrinsically linked to the stability and economic health of the Eurozone itself. It diversifies away from the dollar, but not away from fiat risk entirely. The regulatory landscape, while clarifying under MiCA, will continue to evolve and shape the operational environment.
Conclusion: A Sign of a Maturing Market
The surge in Circle's EURC supply to over $246 million is more than just a numerical milestone; it's a tangible indicator of a maturing stablecoin market seeking diversification beyond the US dollar. Driven by global trade uncertainties, geopolitical shifts, and a desire among European users and savvy traders to hedge FX risk, Euro-based stablecoins are carving out a growing niche. While the dollar-pegged giants still dominate, the ascent of well-regulated alternatives like EURC signifies a crucial step towards a potentially multi-polar stablecoin future. It underscores the demand for trusted, compliant digital representations of major world currencies, offering users greater choice and resilience in an increasingly complex global financial landscape. The journey for EURC and its Euro counterparts is still in its early stages, but the trend towards diversification is clear, promising a more varied and potentially more stable digital asset ecosystem ahead.
DXY: Summer CRASH but here is why it will SKYROCKET after.The U.S. Dollar Index is oversold on both its 1D and 1W technical outlooks but on the 1M it just turned bearish (RSI = 42.641, MACD = 0.810, ADX = 21.680). This is because it crossed under its 1M MA50 for the first time since January 2022. For more than 3 years the 1M MA50 has kept it on the upper side of the 2008 Channel Up but now the time has come for it to aim at its bottom as every time it broke under it, the pattern dropped more and made a bottom a few months later.
We anticipate a bottom around July, ideally with the 1M RSI inside our Target Zone, which consists of the last two lows. Then the new bullish wave of the pattern should begin, reaching the January 2025 High by the end of 2026.
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Dollar Index Tests Key Demand Zone: What's Next?The Dollar Index is currently testing a major demand zone between 99.50 and 101. This area has marked the end of downward moves and the beginning of dollar rallies five times since early 2023.
The recent downward pressure is largely driven by rising expectations of an economic slowdown and a strengthening euro.
At this point, several possible scenarios could unfold, depending on how the market reacts to this key support zone:
Repeat of the Past: Just like the previous five instances, the Dollar Index rebounds sharply from the zone and starts a strong upward move.
Trendline Test: The Dollar Index breaks below this zone and moves toward testing the long-term uptrend line that originated in 2011.
Fakeouts and Reversal: The Dollar Index briefly falls below the demand zone, approaches the long-term trendline, and then stages a false recovery above the zone. After trapping both bulls and bears and creating a fake breakout signal, it dips below the trendline before reversing and beginning a new medium-term uptrend that ultimately aligns above the long-term trend.
Given the high level of global economic uncertainty and recent sharp reversals in financial markets, the third scenario may carry slightly higher probability. A similar pattern played out in 2017, when both the 200-week moving average and the demand zone were broken. The key difference this time is that TVC:DXY is much closer to the long-term trendline.