So I made this chart to simply start a conversation with you or just as a journal for myself. Maybe the Dollar won't dip so fast after all and maybe a lot of us have it wrong. If it turns, it will turn fast.
We will find out shortly and I am not going to jump on this trade any time soon. Instead I will be watching closely.
On a technical level, this is a bonafide high-top consolidation dating back over the last 6 or so years, and if anything it is likely on a pure technical level that within the next 6-12 months the DXY would fall to 80 or lower.
On a fundamental level, if the DXY actually went to 115-120 that would not only be deflationary but also crash the market. The Fed and central banks would never allow the USD to approach these levels and would use every tool in the sandbox, including massive currency swaps to prevent this. In reality, the Fed wants to crash the dollar to keep the equity market elevated for as long as possible.
On a pure "economic" standpoint, the USD typically rises prior to and during any sort of potential recession, but falls thereafter. As long as the "rest of the world" looks better, there is no reason for the USD to rise. If you take a look at Asia and EU they have combated the virus better than the US and their economic data has rebounded somewhat.
If you look at Gold and Silver they are telling you the USD also won't rise anytime soon. Moreover, for those who use "COT" as a way to set-up there trading - that is one of the biggest mistakes ever as its grossly oversimplified and cannot be used as a single means of predicting micro movements.
USA seems awfully quite about their currency going to the dogs.
My thoughts are, either
This is a trap and we are soon to hear about and see a big ole reversal
They want their currency to go to the dogs because they could then use that as a reason / example as to why they should go full digital dollar