The US Dollar Index ([DX/Y]) took out support to mark its fifth consecutive sell signal.

The US Dollar Index (DX/Y) has been in a steady decline since early 2025 but had established a strong level of support going back to July. This support broke on Tuesday when DX/Y dropped below 96 to break a triple bottom and mark its fifth consecutive sell signal. On its longer-term one-point chart, DX/Y’s next area of support is 89-90, so there is a good amount of room to fall. While there are plenty of headlines about the US Dollar, it is now back to levels last seen in 2021 with the next big level of support dating back to 2021 as well. So, be wary of any words proclaiming a collapse. Nonetheless, the USD is in a clear downtrend and the path of least resistance is lower.

This is a green light for certain asset classes, particularly precious metals and ex-US assets which have done very well over the last year. While precious metals are very overbought just about any way one looks at them, a lower USD is still a tailwind on longer time frames. While precious metals may be inactionable in the short-term, international assets are in a better place although still overbought. Secondly, momentum and relative strength strategies have done well in the international space over the last few years, as we’ve talked about extensively (read more here). This has been most evident in developed markets, but emerging markets have been improving for momentum strategies. The image below shows the relative strength spread for both developed and emerging market equities with both lines exploding higher as high-momentum names are doing better than low-momentum names.