DXY – End of the Dollar Advantage? Shorting a Broken Trend

The U.S. Dollar Index has broken below key multi‑year levels and printed a fresh four‑year low after losing its interest‑rate advantage, as the Fed shifts from fighting inflation to cutting rates to defend growth. With cumulative rate cuts of up to 75–100 bps expected in 2026 and capital already flowing out of U.S. assets into higher‑yielding Eurozone and EM markets, the structural bid under the dollar is fading and rallies are increasingly being sold. At the same time, aggressive fiscal deficits, political pressure on the Fed from the Trump administration, and growing talk of de‑dollarization are undermining confidence in the dollar as a safe‑haven, reinforcing the bearish macro backdrop. Technically, DXY has cleanly broken the 97.0 floor, extending a downtrend from 2025 and confirming a sequence of lower highs and lower lows, so my bias is to sell corrective bounces back into broken support / fresh supply and target continuation toward the 95–97 handle in line with major bank forecasts for another 3–5% downside this year.