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🌐What Is the U.S. Dollar Index❓ ✅Why Be Interested? The strong dollar has been getting a lot of attention lately. Some U.S. companies are blaming the strong U.S. dollar for lackluster earnings, while economists say it's helping the Federal Reserve’s ongoing fight against high inflation. But how do you know when the dollar is strong or weak? That’s the job of the U.S. Dollar Index (DXY) ☑️What Is the U.S. Dollar Index? The U.S. Dollar Index is a market index benchmark used to measure the value of the U.S. dollar relative to other widely-traded international currencies. The Federal Reserve established the dollar index in 1973 to track the value of the U.S. dollar. Two years earlier, President Richard Nixon had abandoned the gold standard, which allowed the value of the dollar to float freely in foreign exchange (forex) markets. Since 1985, the dollar index has been calculated and maintained by Intercontinental Exchange (ICE). ☑️The Dollar Index History and Makeup The formula for calculating the value of the U.S. Dollar Index includes the dollar’s relative value compared to a basket of foreign currencies. Initially, it included the Japanese yen, British pound, Canadian dollar, Swedish krona, Swiss franc, West German mark, French franc, Italian lira, Dutch guilder, and Belgian franc. Following the creation of the euro in 1999, the number of currencies was reduced and the formula for the dollar index was adjusted. Today, the basket includes just six currencies: the euro (EUR), Japanese yen (JPY), British pound (GBP), Canadian dollar (CAD), Swedish krona (SEK) and Swiss franc (CHF). ✅How Is the U.S. Dollar Index Used? The USDX allows traders and investors to monitor the purchasing power of the U.S. dollar relative to the six currencies included into the index's basket. Investors also use the dollar index as a litmus test for U.S. economic performance, particularly when it comes to imports and exports. The more goods the U.S. exports, the more international demand there is for U.S. dollars to purchase those goods. When demand for the dollar is high, USDX rises. ☑️Dollar Index Shortcomings: The weightings of the currencies used to calculate the index were based on the United States’ biggest trading partners in the 1970s. As a result, its calculation doesn't include emerging market currencies, like the Mexican Peso (MXN) or commodity currencies. It also doesn't include China’s renminbi (CNY), even though China is now the largest U.S. trading partner by a wide margin. Therefore, the index may be less useful as an economic measure than in previous decades. ✅What Makes the U.S. Dollar Strong? A combination of higher inflation, the Fed's aggressive tightening campaign and a global search for yield have all contributed to the strong dollar. A strong dollar means other global currencies have been relatively weak, which exacerbates inflationary pressures and financial market volatility. 📍In Conclusion: The Dollar Index can be used as a gauge of the Dollar strength or weakness, and it’s futures can be used to profit form Dollar moves without betting on any individual Dollar currency pair which provides diversification. However, the Index is somewhat outdated which needs to be accounted for when using it. Your Like and Comment are the best Thank You😊
Education
by ProSignalsFx
4
🔥The LAST hope for crypto: why DXY may pump BTC soon❓Hi friends! This educational idea about the dollar index and entire crypto market will be really usefull for the beginners and the experienced traders also. I`ll explain you several fundamental and technical reasons why and when BTC ans other crpyto will start rise. You can also use it in your trading to identify the global trend and open more succesfull trades. As far as you may know, ✅the stronger the dollar index (DXY) the weaker all global assets and vice versa. This means that when the index rises, most stocks, cryptocurrencies fall. When the index falls the most assets grow very fast, especially such volatile ones as 🔥crypto: Bitcoin, altcoins and 🔥shares of technology companies: Tesla, Meta, Apple, etc. But when actually BTC and other crypto will start it's rise and you can open your best long trades❓ I explain you this in the both chapters about fundamental and technical analysis. ✅ Fundamental analysis Now the dollar index is strengthening amid the Fed rate hike. This means that we have to wait until the trend reverses and the dollar index starts to fall. After that BTC and altcoins might start it`s new BULL MARKET. 📊 When the dollar index (DXY) starts to fall? The dollar has strengthened significantly against other currencies in the world (pound, euro etc.). This is caused by the latest rate hike to 3.25% and expectations for an increase to 4.4-4.75% by the end of 2022. The stats for traders who want to understand how the growth of dollar index (DXY) affects other assets and currencies: 🚩The Euro is at 20 year lows. 🚩The Yen is at 24 year lows. 🚩The Pound is at 37 year lows. 📊 Do not be surprised that Bitcoin fell so much🔥, because according to the latest data, even the institutionals (big players) also scared and opened the biggest hedge positions since 2008. 🚩 It can be assumed that from the end of 2022 or early 2023 we can see a global reversal of ALL markets, including crypto depends on FEDs rate hicking end. ✅ Technical analysis 📊 14 year channel on DXY Pay attention to point #4 on the dollar index chart. This is where the global uptrend for DXY and global downtrend for BTC began. The strongest dependence! 📊 When to open a long trade on Bitcoin❓ The end of the rate hike by the end of 2022 coincides with the technical analysis on the dollar index chart. The index is now at point #5, which is the upper boundary of the channel and the srongest resistance for the dollar index. It is worth adding that this is not just a channel on the 5 min chart, which globally has no significance. This is a huge 14 year channel (‼️) on the weekly chart, which the price will test for the 5th time! This is a powerful signal for a reversal and resistance for the price. 🚩 The higher the timeframe, the more traders see it and, accordingly, the greater the price reaction on it. Montly>Weekly>Daily>4h>1h>... 🔥We can expect the index to fall from point #5 or at least partially consolidate at these levels before falling, as it was back in 2017 (or point #3). This can pull the price assest including BTC and altcoin to the new ATH. 📊 BTC global bottoms. In addition, the reversal of the dollar index coincides with the formation of Bitcoin's global bottom. Bitcoin began 3/4 of its bull markets with consolidation at the bottom, which is happening now. 🚩 Of course, local manipulations with the collection of liquidity below $17,000 are very likely, but even now you can start to look for a good entry point in the trend reversal. For example, it may be the pattern of higher lows and higher highs, which is characteristic of a bullish trend. ✅ I use much more advanced trading systems to identify the best entry points and open trades either short or long, about which I write my ideas on TradingView, but this pattern will definitely help both beginner and experienced trader to earn more. Traders, will you use this analysis in your trading❓ When exactly do you expect the global bottom on Bitcoin❓ Let's discuss it in the comments. 💻Friends, press the "boost"🚀 button, write comments and share with your friends - it will be the best THANK YOU. P.S. Personally, I open an entry if the price shows it according to my strategy. Always do your analysis before making a trade.
Education
by Yuriy_Bishko
22
🔍Studying horizontal volumes🤔🔍Volumes are one of the most useful tools on the market, That gives the most objective information about the alignment of forces between buyers and sellers (with qualitative analysis, of course). It is necessary to learn how to correctly interpret volumes ( volume analysis) and the trader gets a powerful tool at his disposal. Add to this risk management and money management (without this, you will never succeed in the market) and get one of the most profitable strategies. There are two types of volume: horizontal and vertical. And in this eduaction idea, we will get a little acquainted with horizontal volumes. 🧐 What is it? Horizontal volumes are a histogram based on the number of trades made at a price level. Unlike vertical volumes, that tells us about the volume traded for the set time period, horizontal volumes show the volume traded at the price level. This tool will allow to identify highly probable reversals, as well as areas of support and resistance . Thanks to TradingView, everyone can use the horizontal volume indicator for free. Thank you so much🙌 📊 Horizontal volume indicator includes: ➡️ Value Zone/Area ➡️ VAH (value area high) ➡️POC (point of control) ➡️ VAL (value area low) All of the above can be seen on the graph (marked on the graph above). The Value Zone/Area is the so-called "body" of the histogram for the selected period and is formed in the place where 70% (by default) of the total volume has passed. 🟡 VAH (value area high) is the top line of the value area. The upper line of the value zone can play the role of resistance and support. 🔴 VAL (value area low) is the bottom line of the value area. Formed where volumes are declining. The lower line of the VAL value zone can also play the role of resistance and support. You need to be very careful when the price approaches VAH and VAL❗️ 🔵 POC (Point of Control) is the most important level. It is a support or resistance zone depending on where the price is above or below the POC. As long as the crowd has not formed an imbalance in the POC area, the price will move either higher or lower than the POC. At this time, it is better not to trade, and let the price decide, entering from a re-test of the formed balance. 📈 How to trade? Remember that everything needs experience! You will need time to develop your strategy based on horizontal volumes or to include this tool in your existing arsenal. Analysis, observation and again analysis! Pay special attention to POC, this level is the most important and interesting in terms of opening a position. Here you should pay attention to the weekly POC and intraday. On the charts above, you can see trades in Gold ( XAUUSD ) and Silver ( XAGUSD ) that were opened exactly from the POC week (previous). You can observe the results yourself. Of course, there are also losing trades, but with the observance of risk management and a systematic risk/reward ratio, success is guaranteed. 🔴 Conclusion Horizontal volumes will help identify (but more confirm) support and resistance levels/areas. Near VAH, VAL and POC, one should be as careful as possible, as this is a good opportunity for a probable entry into a trade. We can call it a "creative process": you will definitely see and form many entry and strategy opportunities based on this. 😉 Thank you for reading and profitable trades ❗️
OANDA:XAGUSDEducation
by Market-Mentor
7
How to Use Log ScaleIn this post, I will explain how traders can maximize their use of log scale on Trading View. I will give examples of when you should use log scale on your charts and when you should not, as well as provide an in-depth analysis of its use cases, including how you can actually visualize the entire lifecycle of an asset using the log scale. In the chart above, I highlight the difference that using the wrong scale can have on your trading. The chart shows the monthly candlesticks for the U.S. Dollar Index (DXY). If one applied Fibonacci levels on a log adjusted version of the chart, one would have been under the impression that the dollar index made a huge breakout above its Fibonacci level. However, if one had not applied log adjustment, one would have correctly noticed that price was actually being resisted by the Fibonacci level. From a mathematical perspective, the U.S. dollar index ordinarily should not be log adjusted. I'll explain why below. Log adjustment simply refers to adjusting data on a logarithmic scale. Log adjustment is most suitable for visualizing data of a financial instrument or asset that is moving exponentially or in logistic growth . I will explain and illustrate both of these patterns below, but before I do so, I will discuss assets that do not move in either of these two ways and therefore should not be log adjusted. Financial instruments that are range-bound or that oscillate up and down (e.g. the VIX), ordinarily, should not be log adjusted. Similarly, financial instruments that oscillate relative to another financial instrument, such as the U.S. dollar index (the dollar index oscillates relative to the strength of other currencies), should ordinarily not be log adjusted. Additionally, financial instruments that oscillate up or down solely due to monetary policy action, such as bonds and interest rates, ordinarily, should not be log-adjusted. In all of these oscillator examples, price action does not undergo exponential decay or logistic growth relative to time and therefore log adjustment is mostly inappropriate. Applying log scale to these assets can lead to the trader reaching the wrong conclusion, such as shown with the dollar index example above, and below with an example from the VIX. Regardless of which one of these charts ultimately proves to be right (support holding or breaking for the VIX) it illustrates the problem with using the wrong scale on your charts. Using the wrong scale can lead to the wrong conclusion and put you on the wrong side of a trade. On the other hand, most other financial instruments and assets move in patterns of either exponential decay or logistic growth and should be log adjusted. Most stocks, indices, derivatives, and cryptocurrencies move in patterns that should be log adjusted. Here's an example of exponential decay : Here's an example of logistic growth : Many people look at this chart and incorrectly think that Monster Beverage (MNST) is growing exponentially, but in fact it is not. Applying log adjustment can help show this. As you can see, log adjustment shows that MNST's past price action fits the S-curve of a logistic function almost perfectly. If MNST were growing exponentially, log adjustment would just show a straight line with an upward slope. In the above example, log adjustment can actually show you hints that MNST is in the late phase of its growth cycle as price reaches capacity. As far as I am aware, no financial asset grows exponentially, as there is a finite amount of capital and a finite amount of resources in the world. When a financial instrument appears to be growing exponentially, it is merely in the upward concavity phase/maximum growth period of a logistic function. Eventually, the financial instrument will reach its capacity and its growth will begin to flatten over time. In virtually all cases, assets decline at some point in the future after reaching their capacity. Using log adjustments can help you avoid entering into positions of assets that are near capacity. Log adjustment reveals where an asset is currently positioned in its lifecycle. Take a look at the below example of Citigroup. When the Great Recession hit, Citigroup began to undergo exponential decay (relative to the broader market). See the chart of Citigroup's price action relative to the broader market (S&P 500). In some rare cases, an asset can do the opposite of this: transition from exponential decay to logistic growth. Finding and entering a position just before the inflection point can be among the most lucrative investments one can possibly make in the financial markets. Log adjustment can help you find the inflection point. In the future, I will write a post on how to find inflection points using log adjustment, and I will provide an example of an asset that is about to break out from its inflection point. Aside from visualizing the lifecycle of a financial asset, log adjustment can help eliminate skewness to better visualize patterns. Here's an example below. Log adjustment also allows us to run linear-log regressions. In short, a linear log regression can identify areas where price action is unusually above or below the mean for financial instruments that move up or down exponentially. In the chart above, we see a log-adjusted chart of Money Supply (M2SL). Applying log adjustment to the money supply and then adding a linear-log regression channel shows us that the Federal Reserve was clearly adding too much money into circulation as evident by the M2SL reaching an abnormally high standard deviation from the mean and jumping above the upper line of the regression channel. Log scales help us understand and visualize data about the world around us and the natural cycles which characterize it. Log scales and logistic growth are used in many other scientific contexts from epidemiology (e.g. tracking the spread of a virus) to demography (e.g. analyzing population growth and decline). Take a look at a log scale of Japan's Nikkei Stock Average alongside the country's population from the post-World War II era to the present day. In summary, applying log adjustment is ordinarily suitable for assets that move exponentially or in logistic growth. Applying log adjustment on the price action of an asset that moves in this manner can better help us eliminate skewness, identify abnormal deviations using linear-log regression, and allow us to visualize the lifecycle of a financial asset. Note: Sometimes the wrong scale can be useful in trading because so many other traders are also making the same error and basing their trades on the wrong scale. I've seen this happen quite frequently for Fibonacci retracements. So sometimes it can be helpful to toggle between log scale on and off to see which is causing a price reaction. In general, though, log adjustment is mostly suitable for assets moving in exponential decay or logistic growth, from a mathematical perspective.
TVC:DXYEducation
by SpyMasterTrades
17
🔍What you need to know about the DXY index🤔🔍 DXY INDEX (USDX) displays the value of USD against a basket of six foreign currencies: EUR, JPY, GBP, CAD, SEK, CHF. This index is calculated on the basis of the weighted average ratio of USD to six currencies. ➡️ EUR —> 57,6% ➡️ JPY —> 13,6% ➡️ GBP —> 11,9% ➡️ CAD —> 9,1% ➡️ SEK —> 4,2% ➡️ CHF —> 3,6% ➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖ ❗️ Interesting note ❗️ Given the fact that the EUR is included in the DXY (the largest weight in the index, so it is not surprising that the DXY and EURUSD are highly correlated), the dollar index is the currency of the member countries of the EUR zone. ➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖➖ The index was created by JPMorgan Chase, which officially released this trading instrument to the market in 1973. The level of 100 was taken as the base value. The index was not subject to any changes, except for the introduction of EUR in Europe. DXY allows you to form an idea of ​​the value of the USD and its weight in the world. In addition, this index may signal a recession in the world: the rapid growth of DXY indicates that market participants prefer to withdraw their investments in cash, i.e. in USD, and in moments of economic instability, buy US bonds with these USD. 🔴 Thus, the index is used as a separate speculative trading instrument in the market, and also serves as an indicator that allows you to determine current financial trends.
TVC:DXYEducation
by Market-Mentor
4
📌The ‘Dollar Smile Theory’🙂 🤑 Introduction The U.S. Dollar Smile Theory is a popular notion that illustrates that the U.S. Dollar stays positive in good as well as bad market conditions. This theory was created by a former economist and strategist Morgan Stanley, and it became popular in 2007. This was the time when the U.S. dollar witnessed a significant boost amidst the global recession. Many times, looking at the market conditions, people would think the U.S. dollar would fall, but surprisingly it continues to grow. Why does that happen? The Dollar Smile Theory answers this question. Following are the three scenarios that Morgan Stanley put forward to explain the positive growth of the U.S. Dollar. The Strength Due To Risk Aversion The first reason that the U.S. dollar rise is due to risk aversion. This is a situation where investors rely more on safe-haven currencies such as the dollar, yen, etc. During this period, investors consider the global economy in an unstable position. Hence, they are less likely to invest in the risky asset; instead, they put their cash on U.S. dollars. The Dollar Weakens to New Low – Economic Recession and Slowdown Under this scenario, the US dollar falls to a new low. The bottom of the smile indicates the dull performance of the currency as the economy struggles with weak fundamentals. Additionally, the possibility of falling interest rates also impacts the position of the U.S. Dollar. This results in the market participants steering clear from the dollar. Subsequently, the primary motto of the U.S. Dollar becomes to Sell. Investors move from buying the currency to selling it and moving towards currencies that are providing higher yields. The Strength Of The U.S. Economy Helps The U.S. dollar continues to grow because of the strong economy of the country. After the low, a new smile emerges as the economy sees its light at the end of the tunnel. With the signs of the recovery of the economy, a sense of optimism spreads through the market. This increases the sentiments towards the dollar again. With the US economy enjoying higher GDP growth, the greenback continues to appreciate. This increases the interest rate in the international market. Let’s take a look at the Dollar Smile Theory in reality… As you can see, due to the global pandemic which has caused a lot of economies all over the world to suffer, the U.S. dollar is acting as a safe haven currency. All countries, including the U.S., aren’t doing so great. The key is relative economic growth. If growth from other countries is growing, but the U.S. economy is growing even faster, then the U.S. dollar will swing upward to the right side. So will the Dollar Smile Theory hold true? Only time will tell! Though the theory is quite relevant and backed by some logic, the economy is extremely volatile. So only time will tell how definite the Dollar Smile theory is in the future. In any case, this is an important theory to keep in mind. Remember, all economies are cyclical. They strengthen, then they weaken, they strengthen, then they weaken, and repeat. The key part is determining which part of the cycle the U.S. economy and then compare how it’s doing against the rest of the world . sources:forex.academy .babypips.com this article is For information purposes only!
TVC:DXYEducation
by PRO_SMART_Trader
The Four Quadrants of the Economic CycleUse this as tailwinds for your trading and investments to spot the capital inflows when the time comes. I would say we are likely in the inflationary bust stage (1) coming out of the disinflationary boom stage (4) for the last decade and beyond. I would dare say the Inflationary bust stage is next (2) as the central banks try to kill inflation by raising rates and destroying asset prices. To fix the economic damage they would have to eventually change their monetary policy which would then bring us into an inflationary boom (3) The cycle repeats over and over but I'm positioning for the Inflationary boom stage (3) as I believe this stage will last many years.
Editors' picks
TVC:TNXEducation
by AxeCapp
32
Learn What is U.S. Dollar Index (DXY) 💵💲 Hey traders, I share my analysis, signals and forecasts on Dollar Index occasionally. Quite often I receive questions from you asking me to explain what exactly that index means and why it is so important. Dollar Index (DXY) is a measure of the value of the United States Dollar against a weighted basket of major currencies. This basket consists of 6 following currencies: 🇪🇺Euro (EUR) - 57.6% share 🇯🇵Japanese yen (JPY) - 13.6% share 🇬🇧Pound sterling (GBP) - 11.9% share 🇨🇦Canadian dollar (CAD) - 9.1% share 🇸🇪Swedish krona (SEK) - 4.2% share 🇨🇭Swiss franc (CHF) - 3.6% share The selection of the following basket of currencies and their weight is determined by the significance of a trading partnership between the countries. The index value is calculated with the formula: USDX = 50.14348112 × EURUSD ^ -0.576 × USDJPY ^ 0.136 × GBPUSD ^ -0.119 × USDCAD ^ 0.091 × USDSEK ^ 0.042 × USDCHF ^ 0.036 The index was launched in 1973 and had an initial value of 100. When the U.S.D is gaining strength against the above-mentioned currencies, the index is growing, while its weakness against them leads to a decline of the index value. To conclude, the Dollar Index reflects a fair value of the Dollar and its dominance in global markets. Its analysis may help to make more accurate predictions of the future direction of the dollar related instruments. Do you analyze DXY? ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
12
How To Analyze Any Chart From Scratch - Episode 4Hello TradingView Family / Fellow Traders. This is Richard, as known as theSignalyst. Today we are going to go over a practical example on US100, but you can apply the same logic / strategy on any instrument. Feel free to ask questions or request any instrument for the next episode. You can find the previous two episodes below "Related Ideas" Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
UEducation
by TheSignalyst
13
How To Spot Economical Cycles Top Using [DXY- SPX and VIX] Hi Everyone In this video I want to share an overview of the importance of economic cycles for traders and investors and how we can use Trading View charts with no indicators to figure out key economic signals on the following charts: DXY tops for the end of previous bear markets VIX normal ranges vs Bear cycles ranges The Dow Jones Industrial average is another key chart with SPY charts because everyone has a 401K retirement account these days and people are use to the headlines of the Dow Jones Industrial Average new highs and new lows to shift emotionally between despair and exuberance. It's not unusual for people to throw in the towel just as the market begins to rise in the next economic cycle. As a student of the markets, you need to know when it's time to load up on bargain priced assets and ride the next cycle up and when it is time to slowly sell or fade into the tops of the markets and avoid the downturns. Are we in a normal healthy correction 10-20% or are we heading toward the Great Depression type 50% correction from the top? These charts will help you answer the question. Mastering the market and economic cycles is the key to becoming wealthy in all asset classes - Stocks, Real Estate, and Cryptos Hope it helps... @Marc
CAPITALCOM:DXYEducation
by PowerIndicators
7
Dollar IndexHello everyone! There are many tools on the market to understand the general state of the economy or the company. As a rule, indexes are responsible for this. And today we will discuss the Dollar Index. A little history In 1973, the dollar Index (DXY) was invented and first introduced by JP Morgan. Level 100 is the base value of the index. If the instrument shows, for example, a value of 110, it means that the dollar has grown by 10% relative to the base value. As you may remember, in March 1973, the largest countries in the world introduced a floating exchange rate – this date was the beginning of the index. About the index With the help of the dollar index, analysts determine the strength of the dollar as a whole. This is a very simple analysis tool that almost every analyst uses and shows the index how strong or weak the dollar is relative to other world currencies. Method of calculating the dollar index The index consists of weighted components of the following currencies: euro (57.5%), Japanese yen (13.6%), British pound sterling (11.9%), Canadian dollar (9.1%), Swedish krona (4.2%) and Swiss franc (3.6%). As you can see, the currencies with which the dollar is compared are European countries, which is why DXY is called an "anti-European" index. Based on the number of currencies in the index, people believe that the US is compared with six European countries, which is incorrect, since the euro is officially the currency of 19 EU countries: Austria, Belgium, Germany, Greece, Ireland, Spain, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, Finland, France, Estonia. Add to this 5 more countries — Japan, Great Britain, Canada, Sweden and Switzerland and we get almost the entire civilized world. Although all countries are united by one currency, their economies are still different and therefore each currency of a separate country has a corresponding weight in the index. Dollar Smile One of the Morgan Stanley analysts noticed an interesting feature of the dollar – the dollar can strengthen in both bad and good economic conditions. This analyst was Stephen Jen and it was he who came up with the "dollar smile theory", the essence of which is that the dollar adheres to three scenarios: 1. "safe harbor" - investors believe that the economy is experiencing difficulties, so everyone is investing in less risky dollar assets. 2. When the US economy is weak, the dollar falls. The fall is strongly influenced by interest rates, as a result, everyone gets rid of the dollar, and the smile becomes wider. 3. Perhaps the easiest period to understand is the growth of the dollar due to the economic growth of the United States. People increasingly believe in the country and the currency, which contributes to a greater growth of the dollar. Thanks to this theory, it is easier to understand the market situation in general and the cyclical nature of the market. How to use the index The index is usually used to analyze currency pairs. The index helps to determine the relative strength of the currency relative to the dollar, at those moments when you trade currencies in which there is USD, for example, EURUSD, GBPUSD, USDCHF, etc. The index is also used to find discrepancies. If DXY falls and the dollar weakens, then you will see growth on the GBPUSD chart. If the dollar is the base currency, for example, USDJPY, then the index and the currency pair will move in the same direction. Often you will notice that the dollar index is growing, and the currency pair is standing still – this is the discrepancy, which is very profitable for an observant analyst. In addition to correlation with currency pairs, DXY correlates with oil. The fact is that the largest oil consumers are hedgers of dollar inflation. Hence the inverse correlation of these instruments. Professional analysts, before currency trading, look at the dollar index to understand the trend directions. Conclusions Thanks to the index, you can understand the state of the US economy. DXY is a great addition to your strategy, which helps you identify trends or find discrepancies on the charts. Using the index you will avoid mistakes and increase your profit.
Education
by DeGRAM
3
🎯BTC & $US index: the secret combo for traders!📊Bitcoin is rising while the dollar is falling and vice versa. Today I will use the simple examples to show the pattern that helps to identify the trend of Bitcoin for many years. The instruments that we need: 🔶Bitcoin is the #1 cryptocurrency, the first and foremost crypto-asset, our favorite grandpa. Bitcoin's movement is copied by 99% of all crypto, it is the main indicator of the crypto market. 🔶DXY - U.S. Dollar Index. It was created in 1974 and shows the ratio of the US dollar to the basket of six other major currencies: euro, yena, pound sterling, Canadian dollar, Swedish krona and Swiss franc. The index essentially shows how strong the U.S. dollar is. 💡I've taken a few cycles as an example to make it easy to understand this principle. For the example, I don't take data up to 2017. At that time Bitcoin was with the small capitalization and a big HYPE. You're not interested in perfect examples, but in real experience and usage, aren't you? So, the first cycle of 2017-2018 shows us that: 1. as soon as the index started to fall🐻, Bitcoin had an active bull run. 2. when the index hit lows it was almost Bitcoin's tops. The second cycle of 2018-2020, Bitcoin spent in a huge consolidation and two corrections of -70%🐻 What was the index doing this time? Of course it was rising! Only after the last fall of Bitcoin in 2020, it was able to recover and continue its rise to the new ATH! In the third cycle of 2020-2021 Bitcoin was able to grow to $63-67 thousand due to the unprecedented weakness of the dollar. Now Bitcoin is in consolidation and even the mass adoption and hype around crypto is not help BTC to renew ATH. 🏁The dollar was weakening amid huge inflation and Bitcoin was rising, but when the FED began raising the interest rate and investors began to transfer money from Europe to the United States, the index began a new bull run. You saw an example of what happens during an index bull run. Therefore, we should expect an active phase of Bitcoin growth at the moment when the FED rate hike ends (the end of August) and geopolitical issues will be solved😉 Friends, press the "like"👍 button, write comments and share with your friends - it will be the best THANK YOU. P.S. Personally, I open an entry if the price shows it according to my strategy. Always do your analysis before making a trade.
Education
by Yuriy_Bishko
12
DXY - Elliott Wave Breakdown ✅Following on from our last post on DXY, we have moved up a considerable amount. In our last post we identified the higher timeframe impulsive move and waited for a catalyst, NFP, to move the market in our direction. See our previous post below: In Elliott Wave Theory, the impulsive wave can be broken down into the following 5 waves: Wave 1 - is made up of 5 subwaves (impulse) Wave 2 - Is a corrective wave made up of 3 waves (ABC correction) Wave 3 - is another impulse wave made up of 5 subwaves (impulse) Wave 4 - is a corrective wave made up of 3 waves (ABC correction) Wave 5 - Can be either an impulse or a correction - But its made up of 5 waves. In this scenario, the 5th wave is appearing to be an impulsive move. We have a channel which we will be using as a guide to help us identify when the 5th wave will finish. The way to use DXY is by doing the following: Bullish DXY = USD Strength. Bearish DXY = USD weakness 1. Analyse DXY for reversal zones and identify what the next move is 2. In our last post, we identified a reversal zone and we were waiting for NFP to be the catalyst to get the market moving (FEB 4th) 3. When DXY approaches the reversal zone, we go on to USD pairs and analyse them 4. Find a pair where you think USD will bounce/reject (depending on whether you're trading USD/XXX or XXX/USD) e.g. in the VIP, we correlated DXY with EURUSD. We identified that we were bullish DXY = Bearish EURUSD. We had a trade setup ready and we were waiting for confirmation. See below for the the VIP setup we had. Went into 10pip drawdown and hit TP of over 500pips = 1:50 RR. Hope this post helped a little! Goodluck and as always, trade safe!
TVC:DXYEducation
by WicktatorFX
5
DXY INDEX TUTORIAL 📉📉📉🎯 DXY - USD Index USDINDEX - The U.S. Dollar Index (USDX, DXY, DX, or, informally, the "Dixie") is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies, often referred to as a basket of U.S. trade partners' currencies, this index helps us to understand if USD is bullish or bearish on a short term or long term perspective. 🎯 DXY has two correlations one of them is positive meaning the certain assets moves like DXY and negative corelation meaning certain assets move exactly vice-versa. ✅ DXY Positive Correlations DXY ⬆️ USDCAD ⬆️ USDJPY ⬆️ USDCHF ⬆️ USDRUB⬆️ USD XXX ⬆️ ✅ DXY Negative Corelations DXY ⬆️ EURUSD ⬇️ GBPUSD ⬇️ AUDUSD ⬇️ NZDUSD ⬇️ From a technical standpoint to have a better probability in your trades try to find entries when both DXY and for example USDCAD are in long poi (point of interest) this will increase your chance of having profits as you use inter-market correlations
TVC:DXYEducation
by AnonimFXRO
GOLD'S NEXT MOVE?Little educational post for you guys! If my analysis is correct & the current uptrend is Wave 5, an effective way to estimate how far this last bullish cycle will go is to go back & look at Wave 1, when Gold first started its uptrend in 2006. Wave 1 & Wave 5 tend to be very similar in how many PIPS they move, with a few hundreds PIPS difference which is very accurate for higher TF analysis. I have done this on my chart & it shows me where Wave 5 will possibly end before correcting itself over the next few years! Do this for yourself & you'll find the results you're looking for. I have covered out the price it could go to as it'll only be exclusive on the Market Breakdown Report for Investors. Markets are looking juicy for the foreseeable future🦾
OANDA:XAUUSDEducation
by BA_Investments
BOS - BREAK OF STRUCUTRE ✅✅✅🎯 WHAT IS BOS ? BOS - break of strucuture. I will use market strucutre bullish or bearish to understand if the institutions are buying or selling a financial asset. To spot a bullish/bearish market strucutre we should see a higher highs and higher lows and viceversa, to spot the continuation of the bullish market strucuture we should see bullish price action above the last old high in the strucutre this is the BOS. 🎯 BOS for me is a confirmation that price will go higher after the retracement and we are still in a bullish move Kindly see attached photos
BINANCE:BTCUSDEducation
by AnonimFXRO
DXY EXPLAINED 📉📉📉🎯 DXY - USD Index USDINDEX - The U.S. Dollar Index (USDX, DXY, DX, or, informally, the "Dixie") is an index (or measure) of the value of the United States dollar relative to a basket of foreign currencies, often referred to as a basket of U.S. trade partners' currencies, this index helps us to understand if USD is bullish or bearish on a short term or long term perspective. 🎯 DXY has two correlations one of them is positive meaning the certain assets moves like DXY and negative corelation meaning certain assets move exactly vice-versa. ✅ DXY Positive Correlations DXY ⬆️ USDCAD ⬆️ USDJPY ⬆️ USDCHF ⬆️ USDRUB⬆️ USD XXX ⬆️ ✅ DXY Negative Corelations DXY ⬆️ EURUSD ⬇️ GBPUSD ⬇️ AUDUSD ⬇️ NZDUSD ⬇️ From a technical standpoint to have a better probability in your trades try to find entries when both DXY and for example USDCAD are in long poi (point of interest) this will increase your chance of having profits as you use inter-market correlations
BINANCE:BTCUSDEducation
by AnonimFXRO
Why Are Psychological Levels So Vital In Trading ?WHAT ARE PSYCHOLOGICAL LEVELS AND HOW DO THEY WORK? Psychological levels are market price levels which are often key levels in forex denoted by round numbers. These round numbers frequently act as levels of support and/or resistance. Psychological support and resistance consistently work because of fundamental human disposition. Human beings value simplicity; from a trading perspective this means valuing whole numbers. Traders often use these numbers as entry, exit or stop levels. These stops and limits can alter order flow and price changes. IDENTIFYING PSYCHOLOGICAL LEVELS ON FOREX CHARTS Traders will often call these whole number intervals ‘double-zeros,’ as these prices are at even numbers such as 1.3000 in the EURUSD. See the chart below and observe how the price acts around these levels in the case of EURUSD M charts. These levels works best on Higher timeframes especially on the Monthly charts. The link below reveals one of the example on how a trader can incorporate this particular element of trading in their analysis and setups Cheers, I hope you found this educational material helpful
Education
by FX618Analysis
DXY - How To Use DXY To Enter Trades 🎯For almost a year DXY has been in an uptrend but we may soon be at the end. Last Friday, DXY closed with a bearish candle at the double top region, indicating that there are al lot of sellers at that level. If we continue to show bearish pressure, we can soon end that uptrend and take advantage of USD weakness across the board. Here's a brief breakdown on how to use DXY: DXY up = USD Strength. DXY down = USD weakness 1. Analyse DXY for reversal zones and identify what the next move is 2. On this chart we can see that DXY is indicating bearish price action 3. Now that DXY is at an important level, go on to your USD pairs and analyse them 4. Find out if there's any XXXUSD LONG ideas or if there's any USDXXX pairs that are at the best place to SELL 5. Correlate the DXY movement with the USD charts e.g. DXY showing bearish price action which makes EURUSD buy a great idea as EURUSD is at a key level. Hope that helps! Goodluck and as always, Trade Safe!
TVC:DXYEducation
by WicktatorFX
9