USDX trade ideas
The tariff legal zig-zagWith different US courts firing "shots" at each other over the legality of tariffs, the market is taking a bit of a pause from accelerating further. Let's dig in!
DJ:DJI
TVC:SPX
TVC:NDQ
TVC:DXY
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U.S. Dollar Index . 1MLong-term DXY (Dollar Index) Analysis
Greetings to all valued followers,
This is a long-term analysis and macroeconomic outlook based on Smart Money Concepts (SMC), carefully charted with key reactive zones highlighted. Within this analysis, significant support levels, imbalance zones, and liquidity pools are outlined, which can guide your market decisions as the price reaches these areas.
Key Zones Based on the Monthly Timeframe
Support (Monthly): 97.441
This level is considered the primary support. It’s expected that, should the price reach this zone, a reaction or corrective rally might unfold.
Support (Monthly): 94.629
This is the secondary support, which acts as the next target if the previous support is broken. Typically, these supports indicate potential reversal points or short-term retracements.
Imbalance Zone (Unfinished Business):
Range: 91.782 – 91.436
This zone represents an Imbalance, signalling a strong disequilibrium in the market. The market will likely revisit this area to restore balance (rebalancing).
Significance: It acts as a Liquidity Magnet — if the Federal Reserve fails to provide sufficient liquidity and the support line is broken, the price will tend to continue downward into this zone to gather the required liquidity for economic rebuilding and confirmation of a bearish trend.
Liquidity Pool:
Liquidity (M): 89.209
This is a liquidity pool where, should the bearish momentum persist, the price is expected to test or reach this level. A significant volume of buy and sell orders are accumulated here, making it a crucial target for further downside.
Charting Summary and Outlook:
The monthly supports at 97.441 and 94.629 are key areas to watch, with market reactions to be evaluated via Order Blocks and Break of Structure (BOS) signals.
The imbalance zone between 91.782 and 91.436 may trigger a retracement within the ongoing downtrend — traders should look for confirmation signals in price action.
If the market fails to gather enough liquidity in these zones, the next downside target would be around 89.209, indicating a continuation of the bearish trend.
Persistent concerns about the US economy are weighing on the DXY
US-China tensions deepened as President Trump criticized China’s rare earth exports and threatened broader tech restrictions and visa cancellations for Chinese students. He also vowed to double tariffs on foreign steel to 50% to strengthen the US steel industry. April headline PCE inflation eased to 2.1% (prev. 2.3%, cons. 2.2%), partly soothing tariff-related inflation concerns.
DXY broke below the 99.00 threshold and dropped to a 6-week low. EMA21 is widening its gap with EMA78, suggesting a potential extension of the bearish structure. If DXY breaks below the support at 98.00, the index may decline further to 97.00. Conversely, if DXY reclaims the resistance at 99.00 and breaches above EMA21, the index could advance to 99.50.
Bretton Woods 2.0?Examining the long-term trend of TVC:DXY since the 1980s, we might be facing a staggering 40% reduction in valuation, potentially landing us around 60. If the US were to devalue the dollar this drastically, could it effectively erase the national debt? 🤔 Is Trump bold enough to consider such a move?
We know the FED is going to cut eventually, the question is when and by how much? Initial claims came in higher than estimated, with cracks beginning to show in the labor market, how much longer can JPow hold out?
DXY: Local Bearish Bias! Short!
My dear friends,
Today we will analyse DXY together☺️
The market is at an inflection zone and price has now reached an area around 98.335 where previous reversals or breakouts have occurred.And a price reaction that we are seeing on multiple timeframes here could signal the next move down so we can enter on confirmation, and target the next key level of 98.090..Stop-loss is recommended beyond the inflection zone.
❤️Sending you lots of Love and Hugs❤️
Highly likely the DXY goes down.Trading the DXY increase in 2022 was my best trade of that year. Specifically on the USD/CAD pair not the whole index. Options worked great for this.
I had call options on USX not the company. It's Options on the US Dollar (USX) on the TMX exchange in Montreal Canada. To gain exposure to a rising dollar, or to hedge existing positions, call options on USX can be an effective tool. If DXY is going down like 2020-2021 it's great for stocks and equities. A falling dollar is also beneficial from the perspective of US national debt, as it makes interest payments cheaper in relative terms. Also many people outside the US have USD debts so example they make CAD but their debts are in USD. Well now their company is worth more as debt went down and revenue up. Otherwise known as currency risk. Very important for companies dealing in multiple currencies regardless of the type of business they do.
The US has incentive for a weaker dollar as the interest payments on their debt are now around $1 Trillion a year.
This yellow line represents a significant long-term resistance level. As long as the price fails to break and hold above this zone, the path of least resistance remains to the downside.
The MACD is currently moving down, supporting a bearish bias. However, there are two key bullish signals I am watching that would challenge this view:
The Bullish Crossover: This occurs if the blue MACD line crosses above the orange signal line.
On the daily timeframe, a simple crossover can sometimes be a temporary fake-out (like
the "flip-flopping" seen around April 3rd-9th). While it's a warning, it's not always a
definitive trend changer on its own.
The Bullish Divergence: This is the more powerful signal. If the price has set a new low since
April 2025 but the MACD has formed a higher low, it creates a bullish divergence. A
confirmation of this pattern could signal the end of the long-term downtrend and mark a
serious change in market conditions.
A bullish crossover happening at the same time as a confirmed bullish divergence would be a very strong combination, making a short position on the DXY extremely risky.
**Disclaimer:**
*The information provided in this post is for educational and informational purposes only. It does not constitute financial advice, investment recommendations, or a solicitation to buy or sell any financial instruments. All investments involve risk, and the past performance of a security, market, or trading strategy does not guarantee future results. I am not a financial advisor. Please conduct your own thorough research and consult with a qualified financial professional before making any investment decisions. You are solely responsible for any investment decisions you make.*
BULLISH REVERSALThe frame of a possible trade
On the Daily time frame, going back to what we can identify as the parent move
price gapped to the upside, filled with wicks and candles, price moves to the upside
leaving short-term lows(STL)
Price retraced and took liquidity at STL
On the Daily time frame, price expands violating a Daily Sell-side Imbalance Buy-side Inefficiency
05/29/25 Price gapped up, taking out liquidity at a STH
If this price action implies bullishness, then price will have to take/deliver some form of sellside
This is happening ahead of the Core PCE Price Index Data release on Friday 30/05/25
US DOLLAR FORECAST (update)Update of stalking bullish behavior in the USD instrument.
Intermarket confluence has aligned instruments such as Gold & US Stocks are soft to Bearish, I focus on XAUUSD and US30 outside of Oil to gauge validity of idea.
Thus said focus is on the 5 min chart, we seek rejections framed from 30 min area of interests.
Trigger should be after 5m Bullish playbook, manipulation is a sign of a healthy "auction".
US DOLLAR INDEX Correlation Between Dollar Index (DXY), 10-Year Bond Yields, Bond Prices, and Interest Rates
1. Bond Prices vs. Yields
Inverse Relationship: Bond prices and yields move in opposite directions.
When bond prices rise, yields fall (e.g., demand for safe-haven assets drives prices up).
When bond prices fall, yields rise (e.g., selling pressure due to inflation fears).
Example: A 1% Fed rate hike can cause bond prices to drop, pushing 10-year yields up by ~1.3% .
2. 10-Year Bond Yields vs. Dollar Index (DXY)
Positive Correlation: Typically, higher yields attract foreign capital into USD assets, strengthening the dollar.
A 1% rise in 10-year yields historically correlates with a 1–2% DXY appreciation .
Risk-Off Scenarios: Investors may flock to both Treasuries (pushing yields down) and USD (DXY↑), weakening the usual correlation .
Policy Divergence: If the Fed delays rate cuts amid global easing, yields and DXY may diverge temporarily .
3. Interest Rates vs. Dollar Index (DXY)
Direct Relationship: Higher US interest rates strengthen the dollar by attracting yield-seeking capital.
A 25-basis-point Fed rate hike can boost DXY by 1–2% .
Example: In 2018, Fed rate hikes to 2.5% drove DXY gains of ~8% .
Inverse Impact on Bonds: Rate hikes depress bond prices (yields rise), reinforcing the DXY-yield link .
4. Interest Rates vs. Bond Yields
Policy-Driven: Fed rate changes directly influence short-term yields, while long-term yields (e.g., 10-year) reflect growth/inflation expectations.
The 10-year yield often leads Fed policy shifts. For example, yields fell 150 basis points ahead of 2019 rate cuts .
The 2-year Treasury yield is particularly sensitive to Fed expectations, serving as a "policy barometer" .
Summary Table of Relationships
Factor Relationship with DXY Relationship with 10-Year Yields
Bond Prices ↑ DXY ↓ (safe-haven flows weaken USD) Yields ↓ (inverse bond price-yield link)
10-Year Yields ↑ DXY ↑ (capital inflows) —
Interest Rates ↑ DXY ↑ (yield appeal) Yields ↑ (policy tightening)
Risk-Off Sentiment DXY ↑ (safe-haven demand) Yields ↓ (bond buying)
Key Exceptions and Contexts
Term Premium Dynamics:
Recent 10-year yield spikes (e.g., to 4.54%) are driven by market psychology (90% due to deficits/inflation fears vs. 10% fundamentals) .
Economic Growth Differentials:
Stronger US GDP growth (vs. peers) supports both yields and DXY, while weak growth decouples them .
Geopolitical Risks:
Trade tensions (e.g., US-China tariffs) can strengthen DXY as a safe haven, even if yields dip .
Conclusion
The Dollar Index (DXY) and 10-year bond yields generally share a positive correlation, reinforced by interest rate policies and capital flows. However, this relationship can weaken during risk-off environments or when fiscal/monetary policies diverge. Bond prices and yields remain inversely tied, while Fed rate decisions directly impact both yields and the dollar. Traders should monitor growth data, inflation trends, and central bank signals to navigate these interconnected dynamics.
#DOLLAR #USD #GOLD #SILVER #COPPER
Beware, the US dollar is at a technical crossroads 1) The US Dollar remains the weakest major Forex currency in 2025
The US dollar has had a difficult year on the foreign exchange market (Forex), recording a decline of over 9% against the world's major currencies, despite the Federal Reserve's continuing rigid monetary policy. Technically speaking, the DXY index has reached several theoretical bearish targets, notably according to Elliot analysis, but has not yet touched the key objective of the A=C movement. This dynamic is also evident in the strong chartist compression in weekly data, placing the USD at a potential breakout point. The EUR/USD and USD/JPY pairs are also in long-term hinge configurations, and institutional positions remain broadly bearish on the US dollar against a basket of major currencies.
Two interesting charts on the current situation are presented below: the first shows Japanese candlesticks in monthly data, and the second is a theoretical reminder of how Elliott waves work.
As long as the US dollar against a basket of major currencies (DXY) remains below the indicated pivot line, the trend remains bearish, with a target of 95/96 points. Conversely, a rebound above the hinged pivot line would put an end to the US dollar's annual correction, with the starting point for a technical recovery.
2) A weakening dollar despite an inflexible Fed: how to explain this paradox?
The apparent paradox of a falling US dollar while US interest rates remain high and the Fed does not expect to cut rates before September/October, goes beyond simple rate differentials. At a time when the ECB has already embarked on a policy of monetary easing, the rate differential with the Fed should normally support the USD. However, other factors are taking over: the markets' growing mistrust of US assets, fuelled by trade tensions and uncertainty over Trump's fiscal policy, is weakening demand for dollars. Added to this is a major liquidity factor: the recent increase in the money supply (M2) in the United States and the decline in reverse repo operations, which reflect an implicit easing of financial conditions. This easing is encouraging persistent downward pressure on the greenback, despite a Fed that remains intransigent on rates.
The next release of US PCE inflation, scheduled for Friday May 30, could play an important catalytic role: a higher-than-expected figure would strengthen the case for an even firmer Fed, which could offer the USD a temporary technical rebound. Conversely, confirmation of disinflation would fuel bets on future easing and accentuate selling pressure. In short, the US dollar is not only at a technical crossroads, but also a fundamental one, suspended between forthcoming monetary action and deeper signals from the global liquidity market.
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