DXY: Forex Market Hinges on This in July

by Justin Bennett  · 

July 5, 2023

by Justin Bennett  · 

July 5, 2023

by Justin Bennett  · 

July 5, 2023

Today I’m going to show you exactly how I’m using the DXY to trade currency pairs like EURUSD and GBPUSD.

I’ll share a DXY 12-month chart that suggests a rally later this year, and a wedge pattern that should offer an incredible opportunity in July!

Check out the DXY video below and scroll down for the annotated charts and analysis.

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The US Dollar Index (DXY) is arguably the most underrated chart in the Forex market.

That’s because you can’t actually trade the DXY.

However, you can use it as a proxy to trade currency pairs like EURUSD, GBPUSD, and USDJPY.

In fact, that’s what I do every single week.

I never open a trade on a major currency pair without knowing where the dollar index is on the chart.

And it just so happens that the DXY is one of the cleanest technical charts in Forex right now.

Given that the USD index moves inversely to the EURUSD and GBPUSD, we can use the levels below to time entries on the major currency pairs.

A sustained break above the 103.50 resistance area would trigger shorts on pairs like EURUSD and GBPUSD.

It could also potentially signal higher levels for pairs like USDJPY and USDCAD.

A break above DXY 103.50 opens up the 104.20 highs and the 105.60 range highs.

It could also trigger a much more substantial rally toward 109.00 to 110.00 later this year.

Watch the video above for all of the details.

Alternatively, a sustained break below the short-term trend line at 103.00 would expose the 102.00 confluence of support.

And a sustained break below 102.00 would open up levels like 100.80 and potentially 99.30.

I’m cautiously bullish on the DXY through the remainder of 2023, but knowing these key levels and targets makes trading the major currency pairs much easier.

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