Pay Attention: Looking At The US Dollar Into 2025If you have been watching over comments out of the FED, or the direction of the US dollar and its flow through the Markets, then this will act as a key guide for anticipating and understanding potential moves.
For a considerable period, the DXY has floated within a reasonable range. The predictability this has brought has been coupled with the ebb and flow of 'Soft landing' predictions.
Sentiment Case - Over the last 2 years, anything that comes across the wires to improve and make this view look more likely feeds weakness into the DXY, mostly because of the potential of lower rates in a quicker period. Recent jobs and retail sales data has affected this view and thus caused strength to the upside again).
Price Action - Understanding that the upper and lower boundaries of this range are key indicators for short/long entries respectively is vital to success. These areas are obviously warranted by previous trading activity seen.
The only thing that'd break this is increased risk on/off sentiment to take us higher or lower. Risk off would include a real worry amongst markets and USD inflows, the opposite would include risk on and further USD weakening.
The best thing to do really is to not try to 'predict' when the range will break. If you'd traded within it for the last two years, your job would be plain, simple and easy.
If news sentiment includes further data to suggest rates not falling as quickly as expected, then it's worth noting that these kinds of data (jobs/sales) will generally reflect well for the economic case and growth as they support it.
You must be clear on sentiment drivers at all times and respect the levels present to the upside and downside. Within this, trade price action in reality with logic.
