The dollar index rebounded from a two-month low.
2025-12-17 20:06:28
A week ago, our analysis was as follows:
The dual-trend channel analysis system has been updated;
This confirms that selling pressure is dominating the market.
The predicted price trend is as follows: the price may test the lower rail of the blue channel, which is expected to become a key support level.
As the arrows in the chart indicate, the predicted scenarios have largely come true:
The dollar index fell to a two-month low yesterday, influenced by weak U.S. housing data and other economic news. Both new housing starts and building permits fell short of expectations, further reinforcing market sentiment that U.S. economic momentum is weakening.
Today, the UK released its Consumer Price Index (CPI), showing a significant slowdown in inflation to 3.2%, well below the expected 3.5%. The weakening pound triggered a sharp rebound in the US dollar index.
(US Dollar Index 1-hour chart source: FX678)
From a technical perspective, this price movement demonstrates a strong bullish reversal from the lower boundary of the ascending channel, specifically manifested as follows:
After briefly dipping below the October lows, prices rebounded quickly, a pattern typical of a liquidity trap in the "smart money theory."
Multiple indicators (including the Relative Strength Index, RSI) are likely to form a bullish divergence signal between low point A and low point B.
Taking all the above factors into account, we have reason to believe that the US dollar may regain market favor by the end of the year. The US dollar index is expected to rise back to the middle line of the red channel, and there is even a possibility that it may further test the upper line of the channel.
The dual-trend channel analysis system has been updated;
This confirms that selling pressure is dominating the market.
The predicted price trend is as follows: the price may test the lower rail of the blue channel, which is expected to become a key support level.
As the arrows in the chart indicate, the predicted scenarios have largely come true:
The dollar index fell to a two-month low yesterday, influenced by weak U.S. housing data and other economic news. Both new housing starts and building permits fell short of expectations, further reinforcing market sentiment that U.S. economic momentum is weakening.
Today, the UK released its Consumer Price Index (CPI), showing a significant slowdown in inflation to 3.2%, well below the expected 3.5%. The weakening pound triggered a sharp rebound in the US dollar index.
(US Dollar Index 1-hour chart source: FX678)
From a technical perspective, this price movement demonstrates a strong bullish reversal from the lower boundary of the ascending channel, specifically manifested as follows:
After briefly dipping below the October lows, prices rebounded quickly, a pattern typical of a liquidity trap in the "smart money theory."
Multiple indicators (including the Relative Strength Index, RSI) are likely to form a bullish divergence signal between low point A and low point B.
Taking all the above factors into account, we have reason to believe that the US dollar may regain market favor by the end of the year. The US dollar index is expected to rise back to the middle line of the red channel, and there is even a possibility that it may further test the upper line of the channel.
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