Dollar Index – Weekly Analysis

CANDLES

The weekly chart gave us more than enough to talk about. Remember the purple line at $97.492—the level the Dollar needed to close below to turn bearish? On Tuesday, it made a sharp move under that line, but the bears overplayed their hand and stretched the sling too far. The following three days proved it. Instead of locking in a Falling 3 Methods, the weekly closed with a bullish Inverted Hammer, which also formed a Harami. At the same time, the strength of Wednesday through Friday preserved the Bullish Engulfing that Dollar printed in the last week of July. Quite a sequence.

And that was only the weekly. On the daily, DXY confirmed a reversal with a Piercing Line backed by a Three White Soldiers formation. Friday added even more fuel: simultaneous Bullish Engulfing combos on the 2D and 3D frames, as if the Three White Soldiers weren’t enough. With the 1D through 3D frames closing above the 8 DMA, the move now resembles the initial trajectory of a slingshot release.

Technically, the weekly MACD bullish cross from late July keeps widening—a classic precursor to upside. The marginal new low was printed, perfectly in line with textbook behavior. The cross’s rare magnitude—the lowest in roughly 20 years—only adds to the power of this slingshot. And that Double Bottom we’ve been talking about? It may be closer than most expect. Let’s get prepared.

MACD – Weekly

ELLIOTT WAVES
(no change in assessment, just refreshed the charts)

There are no changes to the long-term targets for the Dollar. The extended wave 4 appears complete, and the July monthly Bullish Engulfing candle now confirms what could be a major turning point. This formation may well mark the beginning of a sustained rally—one that aligns with the broader long-term bullish wave structure we’ve been tracking since the initial chart was published in November 2020.

Road Map

The energy of the rebound off the bottom has been impressive, potentially marking the completion of an Ending Diagonal.

Possible Micro Wave

SUMMARY

The Dollar delivered a strong bullish statement on the 1–3D frames and, on the weekly, showed a pronounced bearish failure that further reinforced the bullish odds. The 15D and larger frames remain bullish as well. With only seven days left in September—and given the short- to mid-term momentum—the index is unlikely to flip bearish on multiple higher frames.

Happy Trading!