DXY U.S. Dollar Index - Daily DXY Chart Update I have updated the DXY chart and present it to you now. We know that in smart money analysis, it shows us the primary market trend structure, and by mapping the daily structure, it indicates that this chart is in an upward trend. Currently, we are looking for suitable areas to buy the dollar. Confirmation of Major High and Market Movements After confirming the major high with the price reaching the first standard pullback, which I indicated on the chart with IDM, and ultimately reaching the Decisional Order Block, we experienced a good upward move together with a proper buy. However, unfortunately, our major high was not broken, and the market pursued a downward phase towards the IFC Candles.
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After looking at technical levels, fundamentals, and institutional positioning (COT data & investor sentiment), here’s a balanced take on where the Dollar Index (DXY) could be headed this week.
Bullish Case (50% Probability) • Key Level: 106.000–105.500 is a strong support zone. If buyers step in, we could see a push toward 108–110. • Fundamental Factors: • Potential U.S. trade tariffs might boost demand for the dollar as a safe haven. • Consumer confidence and inflation data could influence Fed expectations—strong data would likely support the USD. • Institutional Positioning (COT Data): • Net-long positions have dropped (-4.7B), but institutions still hold 26.5B in USD longs—suggesting underlying strength. • More hedging activity, which signals caution but not outright bearishness. • Investor Sentiment: • The dollar has gained about 7% since September, but some funds are starting to scale back exposure. • If 106.000 holds, the short-term trend could stay bullish before any bigger shift.
🔹 Trading Approach: • Look for bullish setups around 106.000–105.500. • Targets: 108.000, then 110.000 if momentum holds. • Invalidation: A clean break below 106.000 signals weakness.
Bearish Case (50% Probability) • Key Level: If 106.000 doesn’t hold, there’s room for a drop to 104.000–103.500. • Fundamental Factors: • Institutional long positions are shrinking, hinting at possible distribution. • Increased bullish bets on the Japanese Yen (JPY) suggest capital may be moving away from USD. • Cooling sentiment on the USD and U.S. equities adds to short-term downside risk. • Institutional Positioning (COT Data): • Big players are trimming USD exposure but haven’t fully turned bearish yet. • If we see further outflows, a move below 106.000 becomes more likely.
🔹 Trading Approach: • Look for shorts below 106.000, targeting 104.000–103.500. • Keep an eye on CPI data, consumer confidence, and trade-related headlines. • If 106.000 breaks, expect smart money to drive prices lower before any potential rebound.
Final Thoughts
DXY is at a make-or-break level (106.000): • Scenario 1 (Bullish, 50%) – 106.000 holds → move toward 108–110. • Scenario 2 (Bearish, 50%) – 106.000 breaks → move toward 104–103.500. • Institutional & Sentiment Insights: • Net-long positions decreasing (bearish pressure). • More hedging (uncertainty, but not full bearish commitment). • Investor sentiment is cooling, increasing the risk of a pullback.
🔹 Bottom Line: Watch how price reacts at 106.000—it’s the key pivot for the next move.