Dollar Index – Weekly Analysis
The U.S. Dollar Index is sharply higher, but the key question is whether this move marks a durable reversal or only the opening phase of a broader structural shift.
In this weekly analysis, we apply our multi-frame methodology, combining candlestick structure, technical indicators, and Elliott Wave analysis, to assess what the dollar’s surge means, evaluate the pressure building beneath the surface, and outline the scenarios most likely to define its next major move.
CANDLES
Indeed, last week’s weak bearish support signaled proximity to a bottom. A sharp move higher closed the Dollar Index this week with an exceptional set of bullish signals. The daily 8/20 EMA bullish cross and the breakout through the 50, 100, and 200 DMA resistance-now-support levels are just a few of them.
DXY is also close to forming a short-term Double Bottom on the daily frame. A monthly close above $100 would establish a long-term Double Bottom as well.
The Dollar Index is now bullish across all tracked frames.
In the April monthly report, we discussed a developing 50/100 MA bullish cross on the 4M frame. It has moved a few basis points closer.
ELLIOTT WAVES
At this stage, there is no substantial evidence to justify a change in the very long-term outlook. In March, the index possibly formed a long-term bottom, though it is yet to be confirmed.
Last Wave
Dollar, indeed, formed an Ending Diagonal and truncated the zigzag, as we discussed last week. The almost vertical reaction from the formation toward the origin of the diagonal provides the clearest confirmation of that hypothesis. Assuming wave (iii) follows the Fibonacci structure of wave (i), the next target zone would fall in the $104–106 area.
On a side note, the Dollar showed very strong directional bullishness against major world currencies, including the euro, pound, yen, Australian dollar, and Canadian dollar. Most likely, this is not an isolated move, but a systemic one: the flight to safety may have begun.
SUMMARY
The Dollar Index has shifted decisively bullish, confirming the bottoming scenario discussed last week and strengthening the case for a larger advance. The move is supported across candles, momentum, and Elliott Wave structure, with the next phase likely targeting materially higher levels.
The strength is also broad-based across major currencies, suggesting that this may be more than a technical rebound in DXY alone. The market appears to be moving into a more defensive, safety-seeking phase, with the dollar emerging as one of the clearest beneficiaries.
