Overtime
Currency markets and the dollar
Good morning,
Today, we’re taking currency markets and the dollar into Overtime.
Yesterday’s Playbook covered the major moves in equity and fixed income markets, but currency volatility has also spiked. The dollar is at a critical juncture from both short- and long-term perspectives.
Today, we’ll review the dollar from multiple time horizons and examine key crosses that make up the DXY basket.
Will the weakness continue, or is this where the dollar digs in?
DXY: The US dollar index
Long-term support line in play
This is the big-picture view that appeared in our 2026 State of the Markets report. The dollar fell more than 12% from January through July of last year, but has since traded in a 5-point trading range between 96-101. The long-term uptrend has been broken, and the weekly MACD is sending a bearish signal, recently rolling over in negative territory.
Hope for bulls on the short-term chart?
Zooming in, there’s still hope for dollar bulls. An attempted break below 96 in January didn’t stick, and over the past two weeks, DXY is attempting to carve out a higher low. There’s a host of resistance between 97.3-98.5, so it’s too early to be outright bullish, but the reaction over the next few weeks will be critical.
How to trade UUP
