USDX trade ideas
Dollar's Rise, Gold's Demise◉ Abstract
The US Dollar Index (DXY) and gold prices have a historically inverse correlation, with a stronger dollar typically reducing gold demand. Key drivers of this relationship include inflation, geopolitical tensions, and interest rates. With a 73-95% negative correlation observed over time, investors should note the current market outlook: the DXY is poised to break out above 107, potentially surging to 114, while gold prices may drop 5% to 2,400 and then 2,300. Understanding this dynamic is crucial for making informed investment decisions and capitalizing on potential trading opportunities.
◉ Introduction
The relationship between the U.S. Dollar Index (DXY) and gold prices is significant and typically characterized by an inverse correlation. Understanding this relationship is crucial for investors and traders in the gold market.
◉ U.S. Dollar Index Overview
The U.S. Dollar Index measures the value of the U.S. dollar against a basket of six major foreign currencies, including the euro, Japanese yen, and British pound. It serves as an indicator of the dollar's strength or weakness in global markets. When the index rises, it indicates that the dollar is gaining value relative to these currencies, while a decline suggests a weakening dollar.
◉ Inverse Relationship with Gold Prices
Gold is priced in U.S. dollars on international markets, which directly influences its price based on fluctuations in the dollar's value:
● Strengthening Dollar: When the DXY index increases, it generally leads to a decrease in gold prices. This occurs because a stronger dollar makes gold more expensive for investors using other currencies, thereby reducing demand.
● Weakening Dollar: Conversely, when the DXY index falls, gold prices tend to rise. A weaker dollar makes gold cheaper for foreign investors, increasing its demand and driving up prices.
Research indicates that this inverse relationship has been consistent over time, particularly in long-term trends. For instance, historical data shows that gold prices often rise when the dollar depreciates, reflecting a negative correlation of approximately 73% to 95% over various time intervals.
◉ Short-Term Deviations
While the long-term trend supports this inverse relationship, short-term anomalies can occur under specific market conditions. For example, during periods of extreme volatility or economic uncertainty, gold and the dollar may exhibit a positive correlation temporarily as both assets are sought after as safe havens. This behaviour can confuse investors who expect the typical inverse relationship to hold.
◉ Additional Influencing Factors
Several other factors also affect gold prices beyond the dollar's strength:
● Inflation: Rising inflation often leads investors to flock to gold as a hedge against currency devaluation.
➖ E.g. In 2022, as inflation rates surged to 9.1%, demand for gold increased by 12% year-over-year, pushing prices higher. Historical data shows that during periods of high inflation from 1974 to 2008, gold prices rose by an average of 14.9% annually.
● Geopolitical Events: Uncertainty from geopolitical tensions can drive demand for gold regardless of dollar fluctuations.
➖ E.g. In late 2023, escalating conflicts such as the Israel-Palestine situation and the ongoing Russia-Ukraine war contributed to a surge in gold prices, with reports indicating increases of over 3% in a week due to these tensions
● Interest Rates: When the Fed raises interest rates, it typically strengthens the dollar as higher yields attract foreign capital. A stronger dollar makes gold more expensive for holders of other currencies, which can reduce demand.
➖ E.g. During the Federal Reserve's rate hikes from March 2022 to early 2023, many investors moved away from gold as they sought higher returns from bonds and other fixed-income securities. This shift contributed to downward pressure on gold prices during that period.
◉ Technical Standings
● U.S. Dollar Index TVC:DXY
The US Dollar Index has been stuck in neutral for two years. But if it clears the 107 hurdle, get ready for a surge to 114.
● Gold Spot/USD OANDA:XAUUSD
➖ Gold prices skyrocketed to 2,790, then plunged. Expect a 5% drop to 2,400. If that support cracks, 2,300 is the next safety net.
Dollar and Trump's WinHi, looking for dollar progression in coming years
most are saying that election result gives dollar a push, for me it's following the pattern
Dollar/dxy is following 2 patterns/ channels one is falling one and other is rising one , so 1st question is whether it choose the continuation of the downward channel or break it and choose to continue with the rising channel , patterns are showing some important level for the coming years in case dollar/dxy continue to follow the patterns , well it depends on the market
will post sub-analysis in the comment section with further deep analysis shortly
DXY: Move Down Expected! Sell!
Welcome to our daily DXY prediction!
We made our analysis today using SMC and ICT trading theories, which, combined with our trading experience all point to the downside. So we are locally bearish biased and the target for the short trade is 106.703
Wish you good luck in trading to you all!
Bullish momentum persists on DXYTechnical Perspective:
DXY extended its rally within the ascending channel, following a breakout of the descending trend line. The price remains in an uptrend with higher swing points seen. A further rise toward the 106.50 resistance and ascending channel's upper bound might occur if DXY sustains its bullish momentum. Conversely, a retracement could prompt a retest of the 105.20 trendline breakout zone and support. Ichimoku Cloud is showing signs of bullish pressure as well.
Fundamental Perspective:
Traders are betting on a continued selloff in US Treasury bonds, anticipating that Donald Trump's policies will drive inflation and keep interest rates high, boosting the dollar's appeal. The open interest in two-year Treasury futures has surged as investors position for rising yields ahead of US key inflation data.
Elsewhere, Elon Musk and Vivek Ramaswamy will lead Trump’s new initiative to cut government waste and reduce federal spending, aiming for 2 trillion USD in savings. The effort will focus on dismantling bureaucracy and reforming federal agencies.
Author: Li Xing Gan, CMT, CFTe,
Financial Market Strategist Consultant to Exness
DXY (USDOLLAR) - Correction Wave Pending
US Dollar is nearing completing Wave 1 and should go in correction for Wave 2 before loading a big Wave 3. Overall bias is Bullish due to many macro factors. This should provide a clarity on how other pairs will behave.
For entries, please wait for at least two candle reversals at the specified level and apply appropriate risk management.
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Disclaimer: This content is for educational purposes only and should not be considered financial advice.
DXY, DOLLAR AT THE CROSSROADFRIENDS..
the result of the United States election is a very positive sentiment for Dollars thats why we seen a strong dollars the last few days..
but there are some information about fed rate cut next month and usually market will react before the actual happening..
these are 2 dxy important level :
107 ( 3 times resist at 2023)
105 ( major trend line break out and still not yet pullback )
my opinion there will be some retest until 105 if break then we will see 100.. if rebound from 105 the price will try to break resistance at 107 and if dxy can break it we shall see dxy return to 110-113
FRIENDS.. ALWAYS DYOR before opening position
DeGRAM | DXY preparing for correctionDXY is near the upper border of the channel, between the trend lines, which the chart formed during the correction on the last downward impulse.
The price has reached the resistance level and is now below it.
We expect a correction after the retest of the channel border.
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Share your opinion in the comments and support the idea with like. Thanks for your support!
DXY: Move Up Expected! Buy!
Welcome to our daily DXY prediction!
We made our analysis today using SMC and ICT trading theories, which, combined with our trading experience all point to the upside. So we are locally bullish biased and the target for the long trade is 106.688$
Wish you good luck in trading to you all!
DXY POTENTIAL LONG|
✅DXY is trading in an
Uptrend and the index has
Broken the key horizontal
Level of 106.500 and the
Breakout is confirmed so we
Will be expecting a further move up
LONG🚀
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DXY Potential Rally to 108: High-Probability Setup with FVG The DXY is currently positioned around 105, showing momentum to potentially push up to the 108 region. This area features a high-probability Fair Value Gap (FVG) on the daily and weekly timeframes, providing a strong confluence zone. Price previously failed to sustain on the monthly OB, indicating a move towards the buyside liquidity above this PD array.
Should we see price react at the 108 FVG, it could present a reversal opportunity, especially given the alignment with overlapping daily and higher timeframe FVGs. However, if bullish momentum continues, this setup may also lead to further liquidity grabs.
Always remember: DYOR (Do Your Own Research).
dxyThis is my opinion with technical analysis
Please respect the following rules:
1- Risk management .
2. Have your own strategy
Is a DXY Pullback on the Horizon? Key Price Action Signals Is a DXY Pullback on the Horizon? Key Price Action Signals to Keep an Eye On
👀👉 The DXY Dollar Index has shown robust bullish momentum recently—but is it overextended? A pullback at a major support level could offer a valuable entry opportunity. I’m watching this zone closely for a possible buy setup aligned with the key criteria covered in the video. In this analysis, we’ll explore essential price action signals to watch and discuss strategies for positioning in the next potential move. Disclaimer: This analysis is for informational purposes only and not financial advice.* 📊✅
DXY is facing resistance zoneAs you know, I’ve been bullish on the DXY and have anticipated a reversal since the now-confirmed bottom just above 100.
With the price now above 106, however, I believe USD bulls should start exercising caution. There’s a very strong resistance zone ahead, ranging from 106.20 to 106.50, with another important level just above 107.
In my view, a correction is likely soon, and I’ll be watching for buying opportunities in EUR/USD and GBP/USD.
#dxy #elliottwave short sell setup wave c 13Nov24This count is based on my assumptions so anything can happen not a trading or financial advice just for educational purposes only kindly do your own ta thanks trade with care good luck.
DXY Potential Short! Sell!
Hello,Traders!
DXY keeps growing in a
Strong uptrend and the
Index is locally overbought
So after it hits a horizontal
Resistance of 106.500
A local bearish correction
Is to be expected
Sell!
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Check out other forecasts below too!
Dxy downgradeDxy trending down, xxxusd going up usdxxx going down, bullish trend at DXY penetrative and crossing bullish resistance,
DYOR always, n keep ur trade safe
DXY makes it to the most important resistance zone.H4 12.11.2024💸 Dollar Index DXY makes it to the most important resistance zone 📉
The dollar index still managed to break through to the most important resistance zone 105.80-106.35 from which I expect a medium-term reversal. Honestly, I didn't think it would be pushed to it, but as it is. Other currencies against the dollar have almost reached their reversal zones, lacking the final rebound. As for me, the level of 106 on the index and the area near it is strong. The situation is a copy of 2016, when the index was also pushed hard, and then a long-term reversal was made to weaken it.
TVC:DXY
Dollar Index has made the break out!#DXY #dollarindex broke the bullish diamond pattern and trend line resistance. The chart seems bullish. If TVC:DXY does not unclaim this breakout, there' ll will serious corrections in markets, soon.
Bullish rise?US Dollar Index (DXY) has reacted off the pivot which has been identified as a pullback support and could rise to the 1st resistance which acts as a pullback resistance.
Pivot: 104.42
1st Support: 103.45
1st Resistance: 106.04
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Disclaimer:
The above opinions given constitute general market commentary, and do not constitute the opinion or advice of IC Markets or any form of personal or investment advice.
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Bullish DXYMinor descending channel
Major descending channel
Ranging/consolidating market
Channel within channel and a market ranging waiting to break to the upsede or downside. For my two pence I will stick to a bullish DXY
DXY Trading JournalDXY Trading Journal
Nov14 Day projections
Price is delivering to a Premium on the weekly/daily. Price broke through a key buy side high. Maybe a market protraction to take out sell side liquidity seems likely. Come down to rebalance yesterdays inefficiency. Seems likely.
I will be looking for shorts and I will trade what the chart gives me.
DXY reviewDXY Is in a very important zone. depending on how price continue to respect those levels we may be bearish.
