Dollar Index – Weekly Analysis
The U.S. Dollar is up 1.67% since the bottom in December. In this DXY weekly report, we break down the latest rally through candles, momentum, key technical levels, and the Elliott Wave framework to determine whether the move marks a meaningful shift or just another countertrend phase. By aligning these signals, we outline the highest-probability paths ahead and what the Greenback may be preparing in the weeks and months to come.
CANDLES
From a technical perspective, the U.S. Dollar Index is showing exceptional strength. Price has moved decisively above the 50-, 100-, and 200-day moving averages, placing all major trend supports firmly behind it. On the weekly frame, an 8/20 EMA bullish cross was recorded today, and the much more consequential 100/200 DMA golden cross is likely to follow within the next one to two weeks. In addition, the monthly structure is at risk of forming a Bullish Engulfing, a development that would further amplify bullish momentum.
If this sequence completes, bullish odds for the Dollar would rise materially, reinforcing both trend and momentum. At this stage, the outlook remains bullish, and the rally is likely to continue.
ELLIOTT WAVES
At this point, there is no substantial evidence to justify a change in the very long-term outlook.
Road Map
The mid term road map also remains unchanged.
Micro
At the micro level, DXY is developing an impulsive move upward, potentially wave iii.
SUMMARY
The Dollar continues its notably aggressive advance, extending momentum into larger time frames and building substantial technical support. If this momentum holds through the remainder of January, bulls are likely to capitalize on the weakness left by December’s bearish positioning, potentially printing a monthly Bullish Engulfing and setting the stage for a longer-term rally.
Overall, the Greenback remains strongly bullish. The development of impulsive Elliott Wave structures to the upside further reinforces the bullish case already signaled by candlesticks and technical indicators.
Happy Trading!
