The Dollar Is Telling Us Something | DXY, EURUSD, GBPUSD, XAUUSD

Why It Matters

Understanding these technical pivots helps traders position for potential moves in major currencies and gold, while the ongoing geopolitical uncertainty keeps market direction ambiguous.

Key Takeaways

• DXY shows bullish change of character on daily chart.
• Euro likely to dip toward 1.16 to address imbalance.
• GBPUSD may test 1.33 if bearish change occurs.
• Gold bears below $4,300 after recent bearish change of character.
• Market remains sideways, driven by Middle East uncertainty.

Summary

In this video trader Justin Bennett examines the recent behavior of the U.S. dollar index (DXY) and its ripple effects on the euro, pound and gold. He notes that after a prolonged sideways phase, the DXY has formed a bullish change of character on the daily timeframe, suggesting a potential bottom near the 99.15‑99.20 region despite lingering internal price action. Key insights include a likely corrective dip in EURUSD toward 1.16 to resolve a lingering imbalance, while GBPUSD could test the 1.33 level if a bearish change of character materializes. Gold, meanwhile, has turned bearish after a recent change of character, with the next support target around $4,300. Bennett emphasizes the importance of monitoring break‑of‑structure (BOS) and imbalance zones for entry points. He cites specific chart patterns: the DXY’s daily BOS above prior highs, the euro’s unmitigated displacement candle below 1.16, the pound’s recent BOS that created a protected low, and gold’s bearish COC below $4,300. These technical signals, combined with the broader geopolitical uncertainty in the Middle East, underpin his trade outlook. The broader implication is that markets remain indecisive, making short‑term directional bets risky. Traders should watch for decisive breaks of the identified levels to confirm bias, while remaining mindful of the geopolitical backdrop that could trigger sudden volatility.

Original Description

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Was that the low for the US dollar? And what does it mean for pairs like the euro, the pound, and gold?

Markets have been very sideways over the past few weeks, with a lot of this tied to what's going on in the Middle East. Not a lot of trends developing, but on the four-hour DXY we did see the gap close and a bullish shift off the recent highs and lows. We still have that imbalance up in the 100 region, and the DXY has not taken out the prior low. Everything right now is just internal price action.

If we go to the daily timeframe and ignore the internal noise, we have a clear BOS and a close above the external high, giving us a bullish change of character. So this recent pullback could just be mitigating that area before we get a higher low. The DXY was down sharply in 2025, and a shift into bullish structure over the coming weeks or months makes a lot of sense.

For the euro on the four-hour, we had a bullish change of character following a downtrend that lasted several months. But below the recent low, there's a displacement candle and an imbalance that's completely unmitigated. The market is looking a little heavy up here, and I would expect a move down toward 1.16, possibly a bit lower, to mitigate that imbalance.

GBPUSD is a similar situation. After a really nice downtrend with clean lower highs and lower lows, we got the BOS and close above to confirm the bullish change of character. But like the euro, there's an unmitigated imbalance back here. The 1.33 region is where we are potentially headed to mitigate. If we get a close below the recent protected low, that's a bearish change of character, and the short would come on any imbalance that forms on the move lower, not on the break itself.

For gold (XAUUSD), I still don't see a confirmed bottom. The relief off the lows came up and mitigated the imbalance back here, and once we got the close below the recent low, that gave us a bearish change of character. Below 4,300 is still what I'm eyeing for gold over the coming days. If we start taking out the recent highs, that could change things, but for now I am relatively bearish.

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CHAPTERS

0:00 Was That the Low for the US Dollar?

0:13 DXY Four-Hour Analysis

1:53 DXY Daily Timeframe Bullish Change of Character

4:10 EURUSD Outlook and the 1.16 Imbalance

5:36 GBPUSD Setup and the 1.33 Target

8:43 Gold (XAUUSD) Bearish Below 4,300

10:29 Wrap Up

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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.