The Dollar Is About to Wake Up: DXY, EURUSD, GBPUSD

Why It Matters

Understanding these imminent moves helps traders align positions with potential USD strength and avoid premature trades in the euro and pound, preserving capital in a volatile FX environment.

Key Takeaways

• DXY's two‑week sideways range likely ending soon, expect breakout
• Potential DXY dip to low 98s before higher low forms
• Euro stuck in discount; short positions require move above 1.1685
• GBPUSD shows mixed bullish/bearish signals; bearish reversal possible
• Confirmation needed on bearish engulfing candle; next day's close decisive

Summary

Justin Bennett reviews the current state of the US dollar index (DXY) and its major cross‑pairs, arguing that the recent two‑week sideways consolidation is unusually long and likely to end. He points to historical patterns and the tight range on the four‑hour chart as evidence that a breakout is imminent, though he warns the DXY could first dip toward the low‑98s before establishing a higher low, keeping a long‑term bullish bias on the dollar.

On the euro, Bennett notes that the pair remains in discount territory and that short‑selling is unattractive until price climbs above roughly 1.1685, entering premium. A descending channel on the eight‑hour chart further reduces the odds of a strong upward move, meaning traders should wait for a clear premium breakout before taking shorts. For the pound, the chart shows both bullish and bearish changes of character, with a recent bearish engulfing candle that only becomes meaningful if the next day closes below today’s low, suggesting a potential bearish reversal.

Key examples include his remark, “It’s very rare to see the DXY sideways for more than two weeks,” and the illustration that “I can’t short the euro in discount; I need to see it move into premium.” He also highlights the importance of candle confirmation, citing past instances where a bearish engulfing candle failed to signal a down move when the subsequent close stayed above the low.

The analysis implies that forex traders should monitor the DXY for a breakout or dip, position euro shorts only after a premium breach, and watch GBPUSD for a confirming bearish candle before committing to a short. Using SMC concepts, the video stresses disciplined entry points and the need for clear structural signals before acting.

Original Description

I just launched a free 3-day SMC strategy course that walks through exactly how I trade structure, liquidity, and entries as a full-time trader.

You can access it here: https://access.dailypriceaction.com/smc-strategy

The DXY has been sideways for the second half of May, and I think this consolidation is nearing an end. In today's video, I'm walking through my exact game plan for the dollar, the euro, and the pound heading into next week.

On the DXY, I'm still longer-term bullish based on the daily chart. The bigger question is whether we get a move down toward 98.15 first to form that higher low, or if we just break out straight from here. Either way, if you're looking to buy, you want to buy low instead of chasing this higher.

The euro is the trickiest of the three right now. We've been completely sideways, and the problem is simple: I can't short in discount. I need to see EURUSD move up into premium above 1.1685 (ideally before June 4th) to start looking for shorts. If we don't get that move, it's going to be very difficult to short this market in any meaningful way.

The pound is giving us a bit more clarity. We had that bearish change of character on May 14th, and on the one-hour we just closed below the external low at 1.3375. That could be telling us the top is in for cable, which would also line up with a stronger dollar.

One thing to watch closely: today is forming a bearish engulfing candle on the daily. But don't get blindly bearish here. The candle alone means nothing. We need tomorrow's close below today's low to confirm. If Friday closes back inside the range, this signal is off the table.

Also wanted to use this video to ask you guys directly. Markets have been quiet, and I want to hear what you want me to cover next. Drop a comment below and let me know what markets, strategies, or concepts you want me to break down.

00:00 Intro

00:48 DXY Outlook

04:34 EURUSD Outlook

08:33 GBPUSD Outlook

13:08 Daily Candle Warning

#forex #forextrading #smartmoneyconcepts #priceaction #dxy

SMC LESSONS

BoS and CHoCH made simple

https://youtu.be/FE1bgD9N6DM

Steal my liquidity sweep entry model (beginner-friendly)

https://youtu.be/XH4TAoLCFBk

Premium, discount, and OTE explained

https://youtu.be/UWrvexqN3w8

Disclaimer: This video is for educational purposes only and is not financial advice. Trading forex, crypto, and other markets involves risk and may not be suitable for all investors. Always do your own research and never risk money you can’t afford to lose. I am not responsible for any losses you may incur from acting on the information in this video.