The Turn Of The DXY

Outlining the case for an extended USD fall, with trade ideas.

After reaching highs above 110.00 on Monday, January 13th, the DXY has since declined by nearly 3%. Some may view this as a minor correction in the dollar’s value, following its significant appreciation since early October.

Back in late September, we outlined our reasons for adopting a bullish stance on the dollar in our piece titled “Don’t Bet Against The Greenback.” In hindsight, our timing on calling the bottom was quite accurate. Now, we would like to explain why we are shifting to a short stance on the dollar, particularly in our 0-3 month outlook.

In this analysis, we will highlight the factors contributing to the recent turnaround in the DXY, discuss why we believe this move could continue to extend in the short run, and offer some trade ideas to express this view.