The ICE U.S Dollar Spot Index (DX/Y) returns for a buy signal for the time since January 2025.
While Monday’s (3/16) action saw the U.S. Dollar pullback ahead of a number of central banks global meeting this week, it follows Friday’s (3/13) rally to the Dollar’s highest level since May 2025. The move above $100.50 for the ICE U.S. Dollar Spot Index (DX/Y) brought the chart back to a buy signal for the first time since January 2025 with a triple top buy. The recent rally, driven in the near-term by geopolitical tensions in the middle east that began in February, comes after the dollar had fallen to $96 in January, the currency’s lowest level since early 2022.
The default 0.50 point per box chart returning to a buy signal is a silver lining in what has generally been a bleak picture for the greenback for the prior 12+ months, but the index still maintains a long-term negative trend, trading below the bearish resistance line. Both the default chart and long-term 1 point per box chart highlight the $100 level being an inflection point, having been resistance since July last year and support prior to that from July 2023.
Weekly momentum has been positive for three weeks now, suggesting the potential for higher prices to continue for at least 3 to 5 more weeks on average. Moving forward, investors will watch to see if the Dollar can build on its recent rally to return the long-term 1 point per box chart a buy signal, which would occur with a move above $101. For both the default 0.50 point per box chart and long-term 1 point per box chart, a move to range would change the long the mid-$100 range for the bearish resistance line to be penetrated and the long-term trend to return back to positive.
While investors will watch for further developments on the trend front, it is worth noting the near-term developments for greenback-related funds on the relative front. The peer relative strength chart comparing the Invesco DB U.S. Dollar Index Bullish Fund (UUP) versus the NDW Foreign Currency Index (DWAFXI) on a 2% scale reversed back into Xs following Thursday’s (3/12) action after having been in a column of Os since December 2025. The long-term relative strength still favors the foreign currency index, highlighting the need for further long-term technical developments for the U.S. Dollar to overtake foreign currencies. Apart from the near-term rise relative to its peers, UUP continues to be weak on a near and long-term basis versus other risk-on asset classes. Though still weak from a relative standpoint for the time being, further improvement could lead to further potential gains in relative strength.
