⬤ The US Dollar Index (DXY) is showing signs of life after spending months in a steady downtrend. After falling from above 110 in 2024, the index has been trading inside a clear downward channel and recently bounced off support near the 96 level. The dollar has been flying under the radar lately, but that might be changing.
⬤ What's interesting here is how consistent the pattern has been. Every time DXY has tested that lower channel line since early 2025, it's managed to push back up. The upside has been capped around 100-101, but the support keeps holding. The latest action saw a brief dip below the channel before quickly recovering toward 97, suggesting buyers are still willing to step in at these levels.
⬤ The range-bound trading over recent months shows the market is taking a breather after the earlier selloff. Volatility has calmed down, and the index is respecting both channel boundaries without breaking down decisively. That's keeping the technical structure intact even though momentum remains pretty quiet.
⬤ Why does this matter? Because DXY movements ripple through currency pairs, commodities, and overall risk sentiment globally. When you see consolidation after a big decline like this, it often sets the stage for the next move in market positioning. With the dollar holding support while most traders aren't paying much attention, the next break could catch people off guard and influence broader market dynamics in the coming weeks.
