Technical Analysis On The U.S Dollar (DXY) As Markets Sell On Tariffs

The U.S. Dollar experienced a sharp decline following President Trump's tariff announcement. This drop brought the U.S. Dollar Index (DXY) down to a key trend line that connects the lows of May 2021 and September 2024. After testing this level, the DXY recovered slightly.

This price action reinforces that the DXY remains within a classic wedge pattern, a common consolidation formation in technical analysis. The pattern's upper trend line connects the highs recorded in September 2022 and January 2025.

For technical traders, the crucial aspect is observing the direction of the eventual breakout from this wedge – whether upwards or downwards. A breakout in either direction is expected to lead to a substantial price movement.