The DXY Just Did Something Every SMC Trader Needs To See (US Dollar Analysis)

Why It Matters

A confirmed bullish shift in the DXY could lift the entire forex market, while the pending hourly confirmation creates a decisive fork for traders. The outcome will shape risk sentiment ahead of the month‑end and impact dollar‑denominated assets globally.

Key Takeaways

• DXY broke daily structure, signaling a bullish change of character.
• Monthly support at 97.50 remains intact since 2011, acting as discount zone.
• Hourly chart lacks confirmation, so long positions are on hold pending breakout.
• Strait of Hormuz tension easing could remove risk premium from USD.

Pulse Analysis

Smart Money Concepts (SMC) traders focus on structural breaks, and the DXY’s recent daily break of structure fits that narrative. The index’s shift from a downtrend to a bullish change of character suggests that institutional liquidity is moving toward the dollar, a classic SMC signal. By aligning the daily breakout with a closed price gap from the previous session, the market is pricing in a potential reversal, yet the higher‑time confirmation remains absent. This technical backdrop sets the stage for traders to monitor the next price action closely, especially as the dollar approaches a historically significant support level.

The 97.50 mark on the monthly chart is more than a number; it represents a long‑standing discount zone where the DXY has found buying interest since 2011. Historically, breaches of this level have preceded extended rallies, while sustained respect for it often signals a consolidation phase. With the index currently trading near this support, any decisive move above could trigger a wave of buying from both retail and institutional participants. Meanwhile, geopolitical developments—particularly the de‑escalation in the Strait of Hormuz—are reducing the risk premium traditionally baked into the dollar, potentially amplifying the impact of a technical breakout.

Looking ahead, the hourly timeframe will be the decisive arbiter. Traders will wait for a clear bullish candle or a break above the descending channel to validate the daily signal. Until that confirmation arrives, risk‑averse participants may stay on the sidelines, keeping the DXY’s upside constrained. Should the hourly confirmation materialize, the dollar could rally toward the next resistance around 101, reshaping the risk‑on/risk‑off dynamics that dominate global markets as the month closes. This interplay of technical structure, historic support, and evolving geopolitics makes the DXY a focal point for anyone tracking currency trends.

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 just gave SMC traders a signal worth paying close attention to, and what happens next week is going to determine the direction of the US dollar heading into the end of the month.

In this video, I walk you through the daily, monthly, 4-hour, and hourly timeframes on the US Dollar Index. We cover the bullish change of character on the daily, the critical 97.50 level on the monthly going back to 2011, the closed gap on Friday, and what I need to see on the hourly chart to consider longs next week.

I also get into the Strait of Hormuz headlines and the bigger question for markets right now: with peace looking more likely than war, have markets already priced this in? That's the setup going into next week, and the chart is going to tell us the answer before the news does.

Remember, we trade what's on the chart, not what we think might happen. Right now the chart is showing a daily bullish change of character with price sitting in discount at a major monthly support level. But without hourly confirmation, there is nothing to buy just yet.

If you want to see exactly how I trade SMC full time, grab my free 3-day SMC course using the link below. You'll also find info there on joining us in Discord where I spend most of my time helping traders Monday through Friday.

Trade well, and I'll see you tomorrow in the SMC Outlook.

Timestamps:

0:00 The DXY setup every SMC trader needs to see

0:45 Middle East headlines and Strait of Hormuz update

2:15 Daily timeframe: break of structure and change of character

5:30 Why the DXY is now trading in discount

7:45 Monthly timeframe: the 97.50 line in the sand

10:20 Descending channel and the bull flag scenario

13:00 Hourly timeframe confirmation

15:40 Closed gap and what to watch next week

17:50 4-hour imbalance and upside targets

19:30 Final thoughts and game plan

🔗 Free 3-Day SMC Course: https://access.dailypriceaction.com/smc-strategy

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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.