This may be the big surprise as we kickoff 2025.

January 7 (King World News) – Naveen Nair at Citi:  We highlight three charts we are watching as we start the new year: 

  • US 10y yields have re-tested the 4.64% level. IF we break above, it would suggest higher yields, but with resistance relatively nearby at 4.74%, the move higher could be quite limited.
  • DXY: While the DXY has held below resistance at the 61.8% Fibonacci level, longer term technicals suggest that the USD could continue to tick higher, especially with a triple bottom formation in play.
  • USDCAD has broken below a short term range we saw in end December. However, while this is a short term bearish sign, we think that it could be a chance to buy on dips with a longer term double bottom suggesting further moves higher.

US Dollar Index: Buy USD dips?
Recent price action means that the DXY has slid slightly after testing short term resistance at 108.97 (61.8% Fibonacci). However, we think any move lower towards support at 107.35 (2023 highs) could be an opportunity to reload long USD. 

Time To Buy Dips In US Dollar Index

Longer-Term
Longer term technicals continue to suggest we could see a move higher. We remind that we closed monthly above the 107.35 handle (Triple bottom neckline) which suggests a formation indicated target of ~115.

Long-Term Setup US Dollar Index Will Surge To 115!

This is also close to the resistance at 114.78 (2022 high). Weekly slow stochastics, while in overbought territory, has not crossed lower yet, and we also note that we have seen slow stochastics remain in overbought territory for an extended period of time (for example, in 2022).

Even Longer Term
The monthly chart also provides no clear resistance for a move higher. We still remain well within the upward channel, which puts resistance only nearer to the 121 handle, much higher than the 2022 high.

US dollar Index Monthly Target 121!

The Big Surprise
King World News note:  The US Dollar Index may continue to surprise people on the upside. As Naveen Nair noted the 115-121 zone for the US dollar is now possible on the upside. Regardless of how the dollar trades, it is one of a global basket of worthless fiat currencies that are backed by nothing. That’s why gold has been soaring vs all fiat currencies and will continue to do so in 2025.

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