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USD Index (USX) / US Dollar

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THE LIQUIDITY PARADOX: Charting the Macro Environment for 2025WEN QE !? TL;DR there will be NO Quantitative Easing this cycle. YES the markets will still go to Valhalla. LIQUIDITY DRIVES MARKETS HIGHER. FULL STOP. Global M2 has a highly correlated inverse relationship with the US Dollar and 10Y Yield. Hence why we have been seeing the DXY and 10YY go up while Global M2 goes down. THE SETUP We are in a similar setup to 2017 when Trump took office. M2 found a bottom and ramped up, which toppled the DXY. Inflation nearly got cut in half until July 2017, where it then slowly started to creep back up as M2 and markets exploded. To much surprise, all this occurred while the Fed continued to RAISE INTEREST RATES. This was in part due to policy normalization with a growing economy coming out of the financial crisis and having near 0% interest rates for so long. In Q4 2014, the Fed paused QT, keeping its balance sheet near neutral for the next 3 years. As inflation started rising, QT was once again enacted, but very strategically with a slow roll-off in Q4 2017. This allowed markets to push further into 2018. THE PLAYBOOK M2 Global Money Supply: Higher Dollar: Lower Fed Funds Rates: Lower 10YY: Lower Fed Balance Sheet: Neutral Inflation: Neutral TOOLS Tariffs Deregulation Tax Cuts Tax Reform T-Bills HOW COULD WE POSSIBLY WEAKEN THE DOLLAR? Trump has been screaming from the mountain tops; TARIFFS. Tariffs will slow imports and focus more on exports to weaken the dollar. The strong jobs data that has been spooking markets and strengthening the DXY will be revised to show it’s much worse than numbers are showing. The Fed will pause QT, saying it has ample reserves, but not enable QE. At the same time, they could pause interest rate cuts to keep a leash on markets and not kickstart inflation. Then once all the jobs data is revised and markets get spooked at a softened economy (Q2), they will continue cutting. WHY DOES THE FED KEEP CUTTING RATES EVEN WITH A STRONG ECONOMY? In short, the Fed has to cut interest rates for the US to manage its debt. THE US government is GETTEX:36T in debt. In 2025, interest projections are well above $1T. That would put the debt on par with the highest line items in the national budget such as social security, healthcare and national defense. The Treasury manages its debt by issuing securities with various maturities. When rates are low, they can refinance or issue new debt. As rates rise, the cost of servicing debt increases, and vice versa. It’s one of the underlying reasons why the Fed cut (but no one will say it out loud)… hence why everyone is so confused and screaming that they cut too early and the bond vigilantes have been revolting. HOW DOES THE MONEY SUPPLY GO UP IF NO QUANTITATIVE EASING? We’ve seen this before. President Trump and Treasury Secretary Scott Bessent have been telling you their playbook. In 2017, deregulation and tax cuts led to an increase in disposable income from individuals and corporations. Banks created more money in the markets through lending based on increased economic activity. Global liquidity increased in other major central banks like the ECB, BOJ, and PCOB who were still engaged in QE, and / or maintained very low interest rates, which created more liquidity in the US money supply. We’re seeing the same thing now with Central Banks around the world. The tax reform allowed for the repatriation of overseas profits at a lower tax rate, which brought a significant amount of cash back to the US. Like 2017, the US Treasury will increase short-term bill issuance (T-Bills), providing an alternative to the Reverse Repo (RRP), which reduces RRP usage. This provides liquidity to the markets because once the T-bills mature, funds can use the proceeds to invest in other assets, including stocks. Banks will buy T-bills and sell in the secondary market or hold til maturity, where they can then lend the cash or invest in equities. Another strategy to inject cash into the banking system would be standard Repo Operations. Here the Fed buys securities from banks with an agreement to sell them back later. This would increase lending and liquidity. Hopefully now you can see why markets DON’T NEED QUANTITATIVE EASING ! That would for sure lead to rampant inflation (see 2021), and blow up the system all over again.
TVC:DXYLong
by jonnieking
DXY (INDEX) analysis This chart shows the U.S. Dollar Index (DXY) on the 1-hour timeframe. Key observations: 1. **Support Zone**: The shaded grey area around 108.800–109.000 is acting as a strong support zone, with multiple rejections visible. 2. **Rounded Retest**: There seems to be a rounded retest pattern forming, suggesting bullish momentum might build if the price sustains above this level. 3. **Structure**: Break of structure (BOS) and change of character (ChoCh) markers indicate recent shifts in momentum. The latest BOS suggests the potential for bullish continuation. 4. **Key Resistance**: Immediate resistance is visible near 109.400–109.600. A breakout above this could lead to further upside. 5. **Strategy**: Watching for bullish confirmation above the support zone or at breakout levels could be prudent. Alternatively, failure to hold this zone may lead to bearish pressure.
TVC:DXYLong
by TRADE_CENTER_1
DXY - ANALYSIS👀 Observation: Hello, everyone! I hope you're all doing well. Today, I want to share my personal view on the Dollar Index (DXY) with you. Based on what I see on the chart, I expect the Dollar Index (DXY) to reach the resistance zone of 110.668 to 110.877 . After a small pullback, I anticipate it will start its bullish movement upwards. If the 107.750 level breaks downward and consolidates on the 1H timeframe, a further decline could follow. 📈 Expectation: After a minor pullback, the DXY is likely to initiate a bullish movement and continue its upward trend. 💡 Key Levels to Watch: Resistance Zone: 110.668 - 110.877 💬 What’s your view on the Dollar Index this week? Share your thoughts in the comments below! Trade safe
TVC:DXYLong
by PouyanTradeFX
Daily CLS, Key Level Daily OB , Model 1Daily CLS, Key Level Daily OB , Model 1 you are welcome to comment with your thoughts and share your charts or questions below, I like any constructive discussion. What is CLS? This company is trading for the biggest investment banks and central banks. They trade over 6.5 trillion daily volume. They are smart money of the all markets. CLS operates in the specific times which will give you huge advantage and precisions to you entries. Focus on that. Its accuracy is amazing. Good luck and I hope this educational post helps to become better trader “Adapt what is useful, reject what is useless, and add what is specifically your own.” Dave FX Hunter ⚔
TVC:DXYLong
by Dave-Hunter
7
DXY can still growI am seeing that on a daily basis the strength of $ against Rials is increasing the only option that iran has is a strong attempt to bolster production at all lines of industry at leat to 300 to 600% of the current status. only in this way we will be able to slow down or halt this currency weakness against the US dollar. it has bee alleged that iran can absorb around 2 trillion dollars in foreign investment to boost its economy. after the start of the revolution there has been a downtrend in investment.
TVC:DXYLong
by loginmusa
DXY Tests Resistance at $109.53: Signs of Downward PressureTVC:DXY DXY Tests Fractal Resistance at $109.53 Signs of Downward Pressure and Potential Pullback The DXY has recently tested a crucial resistance at $109.53 but is now showing signs of downward pressure. In this post, we’ll break down the key technical factors indicating the possibility of a corrective move and what traders should watch for in the coming days. Several technical factors now point toward the possibility of a pullback or bearish movement in the DXY: 1. Bearish Divergence Signals Bearish divergence occurs when the price hits new highs while momentum indicators start to weaken. In the case of the DXY, we are seeing this type of divergence, suggesting that buying pressure is diminishing. This could be a signal that the uptrend is losing momentum. 2. 61.8% Fibonacci Retracement Level at $108.98 The 61.8% Fibonacci retracement level is widely considered one of the most important levels in technical analysis, and currently, it is acting as a key resistance zone at $108.98. This level plays a critical role in determining whether the DXY will maintain its upward momentum or begin a correction. As it stands, a failure to break above this level could signal the start of a deeper pullback. 3. Completion of the Bearish Crab Pattern at $109.85 The DXY has recently completed a bearish crab pattern at $109.85, corresponding to the 161.8% Fibonacci extension. This pattern typically signals that the market has exhausted its upward movement, and a pullback/reversal could be imminent. 4. Completion of the Elliott Wave Structure: Wave 5 Equals Wave 1 Elliott Wave analysis also suggests a potential end to the uptrend. The DXY has recently completed a five-wave structure to the upside, where Wave 5 equals Wave 1, indicating that the rally may have run its course. This increases the likelihood of a corrective phase. What to Watch For: Potential Pullbacks Given the current technical setup, traders should closely monitor the following key levels for signs of a pullback: $109.53: The fractal resistance level recently tested. $108.98: The major 61.8% Fibonacci retracement level, as a potential element of resistance. $109.85: The completion point of the bearish crab pattern, a crucial level for confirming a reversal. If the DXY begins to break below these levels, we could see further downside movement, with the potential for a deeper correction. Happy Trading, André Cardoso
TVC:DXYShort
by Andre_Cardoso
DXY RECOVERS AFTER TRUMP’S INAUGURATIONAs markets adjust to the new U.S. administration, “a dawn of a new era," DXY recovers after Trump’s inauguration. After experiencing a decline of over 1%, the index found support around 107.56 and is now trading at 108.40 as of 3:43 PM GMT+4 (Dubai time), marking a 0.61% increase. From a fundamental standpoint, President Trump's second administration is anticipated to have a significant impact on the U.S. economy, with a strong emphasis on key economic policies. This includes but not limited to his announcement of a 25% tariff on imports from Canada and Mexico, effective February 1, 2025, alongside maintaining existing tariffs on Chinese goods. Additionally, his declaration of a "National Energy Emergency" highlights a push to expand oil drilling and deregulate the energy industry. This initiative aims to achieve energy independence and reduce costs but raises concerns about environmental impact and potential legal challenges. In terms of immigration, stricter enforcement and increased deportations are expected to affect labor markets, particularly in industries heavily dependent on immigrant workers. This could result in labor shortages and higher production costs. While these policies aim to stimulate economic growth, they come with potential risks, such as inflationary pressures, trade conflicts, and labor market disruptions. The overall impact will depend on how effectively these policies are implemented and their reception both domestically and internationally. UPCOMING CATALYST On Thursday, January 23rd, the U.S. unemployment claims are scheduled for release at 5:30 AM GMT+4, followed by the crude oil inventory report at 8:00 PM. The next day, Friday, will feature the release of Manufacturing and Services PMIs at 6:45 PM, and to close the week, existing home sales and consumer sentiment reports will be released simultaneously at 7:00 PM. These data points have the potential to significantly influence market movements, underscoring the importance of cautious analysis and strategic decision-making. TECHNICAL VIEW: From a technical perspective, the DXY is recovering from the previous day's losses, which had strengthened major currency pairs such as EUR/USD, AUD/USD, and GBP/USD. Currently, the index is trading around 108.40, with 108.80 acting as a key resistance level. Given the upcoming data releases, a favorable outcome could propel the DXY above 108.80, with potential targets at 109.09, 109.44, and 109.81 in the coming weeks. However, a correction is still a possibility. Conversely, a negative reading could further weaken the dollar, with potential downside targets at 107.48, the psychological level of 107.00, and 106.56. Analysts suggest that breakouts in either direction are possible, depending on the data's impact.
CAPITALCOM:DXY
by CFI
DXY Is Going Down! Sell! Here is our detailed technical review for DXY. Time Frame: 17h Current Trend: Bearish Sentiment: Overbought (based on 7-period RSI) Forecast: Bearish The price is testing a key resistance 109.631. Taking into consideration the current market trend & overbought RSI, chances will be high to see a bearish movement to the downside at least to 107.871 level. P.S Overbought describes a period of time where there has been a significant and consistent upward move in price over a period of time without much pullback. Like and subscribe and comment my ideas if you enjoy them!
TVC:DXYShort
by SignalProvider
1