$DXY Correction?

2022年9月22日

The DXY has been on a rip in 2022 with the US Dollar rising significantly against major currencies. This channel has been pretty consistent and the latest price point is at the peak of it. A strong DXY tends to correlate with weak stocks and risk on assets. Vice versa, a correction here would provide some relief for the markets and currency pairs such as the EUR and GBP which have been in free fall this year.

I'm not convinced the DXY breaks that upper resistance here, especially with the mid terms around the corner. I'd expect a correction and then the macro / risk on/off environment will determine whether the price rebounds nearer the bottom of the channel.

I'm mid to long term bearish on the economy therefore I don't believe we've seen the top of this DXY run. Nevertheless, those trading short term may find value in this price action and correlation.

2022年12月5日

註釋

I never updated this chart but it worked out pretty well. At the time of posting this the DXY index was 111. Although it went slightly higher for a week it did indeed top and has been in freefall for the past 2 and a half months.

Price today is 105, the same as was charted above. I do think we have bottomed on the DXY and we will see a slow grind up again as risk on assets unwind at resistance.