DXY weekend analysis- 23/11/2025:
Please see previous weekend analysis for reference. The price held support and has rallied up and has made new highs. As we approach the end of the year, the price delivery will not be clean as we have fewer market participants. Next week we have thanksgiving day on Thursday and so i do not expect big moves to happen next week. But following that the FOMC meeting comes into focus. We are still bullish on DXY for now. We have moved our support higher up and this support should hold. If price goes below the support, the bullish bias will be invalidated. So as long as the support holds, we can expect price to slowly drift up to the 100.97 target and then into the blue zone. Maybe the FOMC meeting would be used to give the momentum for the DXY to get into the blue zone.
If DXY takes out the highs of Q2, it will upset many big market participants who would have hedged their currency exposure to a falling dollar. So we can have unwinding of the dollar shorts here.
If Muffett’s premise is right, the market makers will be taking shorts in this area where other people would be buying. The sentiment will turn bullish but the market makers would have positioned themselves bearish. We will see what happens next.
As the sell off in Nasdaq and Bitcoin continued into Thursday and Friday, USDJPY started falling. A divergence formed on the 4 hour chart between DXY and USDJPY. On this basids, we can expect price to take out internal range liquidity. These zones are marked Best buy zone and Buyzone. You might wonder why the Best Buy zone is on top of the Buy zone. Muffett says that if price was very bullish, then price will not go below the best buy zone. We will attempt longs in the best buy zone and then we have to review the price action again in the Buyzone and decide whether USDJPY is still bullish.
This has important implications for gold, bitcoin and Nasdaq. If price holds support in the best buy zone, then it is very likely that the risk assets would have found support and we can look out for higher prices into the year end.
Nasdaq analysis will be done during the week.
Disclaimer: Analysis done in good faith and not investment advice. The analysis should be considered as educational and entertainment purposes only. These blogs are to showcase Muffett’s algorithmic trading abilities only.
