DXY Is King Dollar dead?

16 Nov 2022Yes it is a catchy title but isn't far off from what is happening on the U.S. Dollar Index (DXY) since October. This weekly chart shows the strong rejection on the late September Top, which was formed neatly on the Rising Resistance (Higher Highs line) that has been in effect since the November 2008 High.

That High along with the March 2015 formed similar patterns after their rejections: first sudden drop to the 1W MA50 (blue) and then structured 2 year decline supported by a declining level (Lower Lows). Notice that DXY's bottom, hence the best level to buy is when the weekly RSI makes a double bottom (more like either Lower Lows or Higher Lows). The second Low has been the most optimal entry to buy.

We are far from that scenario now and even though the 1W RSI has dropped dramatically, the USD holders can only hope at best for a rebound as the price is approaching the 1W MA50. Of course the price action doesn't necessarily need to repeat past patterns, but this 14 year Channel Up is definitely a pattern to consider.



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