Is the US Dollar Preparing for a Bullish Comeback?The DXY is currently maintaining a bullish setup amid trade negotiations, election developments, and anticipation of key leading U.S. economic indicators this week.
An inverted head-and-shoulders formation is visible on the 4-hour time frame. A decisive catalyst and a breakout above the 100.00 and 100.30 levels are needed to confirm a more sustained bullish bounce from multi-year lows, with targets at 102.00, 103.30, and 104.70 — reversing recent strength in major global currencies.
On the downside, a breach of the 97.00 level could trigger a decline toward the lower boundary of the long-term uptrend channel established since 2008, aligning with the 92.00 zone, and potentially lifting gold and major currencies globally.
Several key events this week could challenge or reinforce the current bullish setup amid ongoing Trump–China trade negotiations:
U.S. Advance GDP & Core PCE — Wednesday
BOJ Rate Decision & U.S. ISM PMI — Thursday
U.S. Non-Farm Payrolls — Friday
Mega Cap Earnings — Wednesday/Thursday
While long-term signals remain bearish, short-term charts suggest a potential bullish recovery, with trade negotiations likely to tip the balance.
Written by Razan Hilal, CMT
