DXY Rally Patterns

The U.S. Dollar Index (DXY) has gained 6.32% since the 2024 elections, breaking out of a two-year range. Analysts wonder if the DXY is nearing a peak, reminiscent of the pattern seen between 2015 and 2017.

Current Trends

Bank of America’s Paul Ciana has suggested that DXY could peak in Q1 2025, following a similar trajectory to its previous highs. A failure to break above significant levels, particularly between 110-112.50, may indicate a market top.

Potential Scenarios Ahead

• Bullish Scenario: If DXY surpasses 112.50, a retest of 114 may follow.
• Bearish Scenario: A retreat near 108.50-110 could confirm the formation of a double top.

Key Technical Levels

• Support Level: 108.50
• Resistance Levels: 110, 112.50, and 114

Conclusion

Monitoring the DXY movement remains crucial as traders navigate these critical resistance levels. Understanding the implications of potential trends will be vital in shaping future trading strategies.