The U.S. Dollar Is Breaking Major Levels

While everyone is focused on the meltdown in technology stocks and bond prices, the U.S. dollar is hitting even more historic levels to the upside.

The U.S. Dollar Index started moving in late 2021 as the Federal Reserve got more hawkish. It accelerated after Russia invaded Ukraine and has continued upward every week since the end of March.

The main pattern on today’s chart is the high around 103.80 where DXY peaked in January 2017. That was a major level because it marked the index’s highest level in over a decade. Prices consolidated in that area for the last two weeks before pushing above it early this morning.

It could be an important event if the breakout holds because DXY is now back to its highest level since December 2002. Continued upside could further hurt risk appetite in the equity and crypto markets. It could also weigh on megacap Nasdaq companies with significant global operations. (A stronger greenback can lower the value of international revenues.)

Traders might want to keep an eye on this chart – especially with the Fed still battling inflation and Europe’s economy under pressure.

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