US Dollar Index Chart Analysis: DXY still In Uptrend Market Structure

The US Dollar Index (DXY) had a green start to 2023, but in the last 3 months of 2022, DXY fell from the September top of $114.77. Now find support around the $103 range.

source TradingVeiw

Dollar Index continuously fell after September ATH like the October candle is a confusing candle but November and December candle indicates is extremely bearish sentiment.

But here is something inserting for you the Dollar Index market structure is still in an uptrend so let’s deep dive DXY monthly timeframe chart.

US Dollar Index Chart Analysis with Fundamentals

According to the DXY market chart, the uptrend continues, as it has since 1981. The September 2022 ATH is the same as the August 1981 Hight, so the 1981 chart fell until the end of the year, then the following year DXY bounced from the $103 level and continued the uptrend chart, so the February 1985 chart set a new all-time high.

source tradingview

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The continuous three-month falling chart of the dollar index made exact support from December 1981, and the resistance level is also the same, as shown in the blue line above, which correlates the previous cycle to today’s cycle.

According to the GDP growth data from 1980 to 1982. GDP was negative for six of the 12 quarters. The worst was Q2 1980 at -8.0%.24 Unemployment rose to 10.8% in November and December 1982. It was above 10% for 10 months.

1980-82
GDP GROWTH Q1 Q2 Q3 Q4
1980 1.30% -8.00% -0.50% 7.70%
1981 8.10% -2.90% 4.90% -4.30%
1982 -6.10% 1.80% -1.50% 0.20%

From 2020 to 2022, the GDP was negative for four of the eleven quarters. Q4 of 2022 is pending, but the overall GDP situation is the same; the rate hikes are higher to combat inflation. In 2020, unemployment during the COVID period was 14%, but overall after COVID, it was around 3.7%.

2020-20
GDP GROWTH Q1 Q2 Q3 Q4
2020 -4.6% -29.9% 35.3% 3.9%
2021 6.3% 7.0% 2.7% 7.0%
2022 -1.6% -0.6% 3.2%

Related: Bitcoin quarterly performance 2022 Full Report BTC Q1, Q2 Q3 & Q4

US Dollar Index Chart Analysis with Inflation Rate

When compared to 1980, inflation is very high, more than 14% and the Fed declares a recession this year, but after the peak, inflation falls quickly, and in 1982 inflation is around 6.8% and the next year inflation is almost under control, at 2.4%.

source: Tradingview

This year, 2022, had the highest inflation rate, at around 9.1 percent, but inflation is now declining; perhaps by the end of 2023, the FED will have control of inflation.

Since 1980, inflation has been falling, and the DXY chart has been disrupted; perhaps the falling inflation rate will catch up with the DXY index.

Wrapping UP

The market structure of DXY says the recent decline of DXY is a market uptrend signal. The support level is from December 1981 and the resistance is the same as in August 1981.