$DXY is threatening to complete a major trend reversal and break out of a multi-year range.
But here's the catch.
The recent strength in DXY has been driven primarily by weakness in the Euro and Japanese Yen, which together account for roughly 70% of the index.
So the move may not be as broad-based as it first appears.
When I step back and look at an equal-weight G-10 Currency Index, the picture is very different.
The dollar is still stuck in its range.
Take a look at the chart:
That's why I'm not ready to declare the start of a new dollar bull run just yet.
If this breakout in DXY is the real deal, I'd like to see the G-10 Currency Index break out as well.
That would tell me dollar strength is expanding beyond just the Euro and Yen and becoming a truly broad-based move.
Until then, I'm treating this as a breakout that still needs confirmation.
Are you betting on a stronger U.S. Dollar, or taking the other side of the trade?
Let me know what you think. I’d love to hear your perspective!
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