DXY Topping? – Trustnodes

The dollar strength index (DXY) may be topping after finding some significant resistance at 105.

The currency hit that level last month, with it retreating significantly. It touched it again last week, but a sharp drop with a bounce to below 105 now raises the question of whether dxy has seen a double top.

105 has not been seen since December 2002, at the heydays of America’s global dominance when the economy was booming.

The boom was back last year, sending DXY into one of its biggest bull run yet, but 20% growth is clearly not sustainable, with it unclear whether we can handle even 3%-4%.

In addition other central banks, especially ECB, have been more dovish than the Fed recently, but that will start changing next month as Europe tightens too.

That will re-adjust the dollar’s price, which appears to be gaining some of its value from oil and gas, presumably because they’re traded in dollars.

Gas prices are now falling. Oil neared all time high as well, so that might fall more significantly too. The dollar should thus also fall.

Yet changing trend presumably is not too easy, so we might get some sideways, with other factors keeping up the dollar, including bonds demand due to rising yields.

The Chinese economy has weakened and significantly, so the dollar may gain relatively, especially as China has to engage in some loosening.

Will Europe grow more than USA however? They have been stagnating for 15 years, but have still grew decently in the first quarter while USA saw a contraction.

If Europe has finally woken, then DXY might not have much more room to rise, but it may well keep these levels.

That should ease pressure on bitcoin, as well as stocks, which naturally have to respond to the dollar as the vast majority of bitcoin trading is in usd.

If DXY has topped thus, bitcoin may well have bottomed. Or, at the very least, it may well be that bitcoin is now clearly at the bottom range, while DXY is at the top range.

There’s just a bit more before DXY reaches its highest level since the 90s and 2000s, just a 10% rise from here putting it above 120.

Do traders at that point say this has clearly topped? It remains to be seen but if commodity prices are starting to move down, then DXY will probably rise a little less and might even fall.

On the other hand the chart might look like a big cup and handle of sorts for DXY, but depending on follow through, it might be an M instead, a double top.

A cup and handle here might seem incredible as that would suggest a huge rise, but for DXY going to 120, or 10%, is a huge rise. So potentially suggesting that the worst for bitcoin is a 10% fall, or $17,000 which it already touched and bounced.