Listen to the latest market mood for the DXY.

The Dollar Index has many reasons for weakness medium term. It’s falling safe haven appeal, the fact that COVID-19 cases are high in the US, and the Fed is expected to add more easing all weakens the USD’s appeal. Furthermore, the US stimulus bill should be passed at some stage and that could be around a $1 trillion package that will further add to the USD’s weakness.

Therefore, we should expect USD sellers on pull backs in the Dollar Index on a higher timeframe.

We expect this trade to play out between now and the next 4-6 weeks.

Trade Risks: If we see a sharp return to risk off trading on a large second wave of COVID-19 that will invalidate this outlook.