Takeaway

The presenter argues for a near-term bounce in the U.S. Dollar Index (DXY), viewing current dips as buying opportunities. This view is based on technical support around 98.50 where buyers appear to be absorbing selling pressure, and futures market data showing speculators remain significantly net long the dollar. Upcoming U.S. inflation data and the ECB rate decision are seen as key volatility catalysts.

What the presenter said

• The US Dollar Index has found support and shows potential for a near-term bounce, with momentum aligning with higher time frames. [00:03, 00:09]
• On the daily chart, a doji with high volume around 98.50 suggests bulls are absorbing selling orders. [01:28]
• Despite a recent pullback, futures market traders are still net long $25 billion in DXY futures, indicating continued bullish sentiment. [00:58]
• The presenter sees dips in the U.S. Dollar as buying opportunities, even if the bigger picture may be bearish. [01:23]
• Upcoming U.S. PPI and CPI data could boost the dollar if reports are hot, leading to a re-pricing of Fed hikes. [02:16]
• The Euro, which accounts for ~57% of the DXY, is showing a rising wedge pattern and a shooting star reversal candle, suggesting bulls are losing steam. [03:01]
• The ECB is expected to hike rates; a hawkish tone could rally the Euro, but a "one-and-done" hike could put it under pressure. [02:02, 02:09]
• USD/JPY has fallen 750 pips in five days and is considered oversold, with bullish hammers suggesting potential for a bullish mean reversion. [03:54, 04:06]

Trade ideas

• Instrument: US Dollar Index

  • Direction: Long
  • Entry/Stop/Target: Entry around 98.50 / Stop implied below 98.50 / Target 101.50.
  • Horizon: Short-term
  • Conviction: Medium

• Instrument: Euro (EUR/USD)

  • Direction: Short
  • Entry/Stop/Target: Entry beneath the swing high zone / Stop implied above the swing high zone / Target 1.1550 or the August V-POC.
  • Horizon: Short-term
  • Conviction: Medium

• Instrument: Dollar CAD (USD/CAD)

  • Direction: Long
  • Entry/Stop/Target: Entry around the May V-POC / Stop below the swing low / Target 1.39.
  • Horizon: Short-term
  • Conviction: Medium

• Instrument: Dollar Yen (USD/JPY)

  • Direction: Long (mean reversion)
  • Entry/Stop/Target: Entry around 153 / Stop not stated / Target not stated.
  • Horizon: Short-term
  • Conviction: Low

Levels and data cited

• US Dollar Index:
  • Support: 98.50 (tweezer bottom, high volume)
  • Target: 101.50 (previous upside target)
  • Other: 100 (minor reflection point)
• Euro:
  • Target: 1.1550 or the August V-POC (Volume Point of Control).
• Dollar CAD:
  • Support: May V-POC
  • Target: 1.39
• Dollar Yen:
  • Support: 153
• Data:
  • CFTC Futures Positioning: Large speculators and asset managers are net long $25 billion in U.S. Dollar Index futures.
  • Upcoming Events: ECB interest rate decision, U.S. Producer Price Index (PPI), and U.S. Consumer Price Index (CPI).

Risks and what would invalidate this

• The ECB delivering a non-hawkish rate hike could put the Euro under pressure, which would be bullish for the presenter's dollar view.
• Official intervention in USD/JPY makes the pair unpredictable for bears.