Get started
US DOLLAR CURRENCY INDEXUS DOLLAR CURRENCY INDEXUS DOLLAR CURRENCY INDEX

US DOLLAR CURRENCY INDEX

No trades
See on Supercharts
Overview News
Ideas
Discussions Seasonals

DXY 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.
TVC:DXYEducation
by NaranjCapital
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
TVC:DXY
by omvats1
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. If you found this analysis helpful, please consider boosting and following for more updates. Disclaimer: This content is for educational purposes only and should not be considered financial advice.
TVC:DXYLong
by MarketsPOV
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
TVC:DXYLong
by lixing_gan
DXY showing signs of 1HR TopDXY currently forming bear divergence on daily time frame and on the 1HR time frame just set a lower high with a prior lower low. Price is still extended up very high and with some consolidation this could still push up however with the rising wedge formation on the 1 HR time fram we will need to break the formation sooner or later and with the current price action It would appear the liklihood is higher for a correction (Pull back) than it would be for continuation over the coming weeks. US economic news has been in line mostkt with expecations with no major surprises. The biggest concern when playing against the USD right now is the reduced liklihood of a rate cut in the near future. Keep in mind when looking at the DXY daily we are at key resistance levels right now. I would watch for breaks above the current high very closely as we still could look for a push to or above the 2022 High around $114.75.
TVC:DXYShort
by Nicholas_k
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
TVC:DXY
by KENAROKTRADINGFX
DXY Will Go Up! Buy! Please, check our technical outlook for DXY. Time Frame: 7h Current Trend: Bullish Sentiment: Oversold (based on 7-period RSI) Forecast: Bullish The market is on a crucial zone of demand 106.564. The oversold market condition in a combination with key structure gives us a relatively strong bullish signal with goal 107.267 level. P.S We determine oversold/overbought condition with RSI indicator. When it drops below 30 - the market is considered to be oversold. When it bounces above 70 - the market is considered to be overbought. Like and subscribe and comment my ideas if you enjoy them!
TVC:DXYLong
by SignalProvider
1
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).
TVC:DXYLong
by INSIDER_INTEL
Is the Trump Trade Fading? The sugar high from Trump’s victory may be wearing off in a few areas. Tesla, once a post-election favorite after Elon Musk’s support of Trump’s campaign, has now reversed direction. Reports suggest that Republicans will end the $7,500 EV tax credit—a move that’s sent Rivian tumbling 9%, while Tesla is down nearly 4%. Shares of Trump Media & Technology slid 8% today. But being a meme stock, analysis here won't tell us much. In a notable signal, the CFO and two other insiders sold over $16 million of stock in the week following the election. Yet, the U.S. dollar remains resilient, possibly buoyed by the Cabinet picks coming out of the Trump administration. Marco Rubio’s nomination as Secretary of State suggests a tough stance on China. Known for his anti-communist positions and support for Hong Kong’s democracy movement, Rubio has advocated for tighter export controls on U.S. technology and visa sanctions against Chinese officials, hinting at a policy that may go well beyond tariffs.
TVC:DXY
by BlackBull_Markets