- Bearish DXY chart confirms bullish momentum, signaling gains for crypto, stocks, and commodities.
- Weaker job growth and rate cut expectations put pressure on the U.S. dollar.
- Bitcoin and Ethereum benefit as investors shift capital from the declining dollar.
The U.S. Dollar Index—DXY, is struggling to maintain upward momentum, creating bullish conditions for other markets. Trading at 107.83 after the latest Nonfarm Payrolls (NFP) report, the dollar faces increasing pressure. Job growth slowed, and U.S. yields dropped, signaling economic weakness. Investors now expect multiple interest rate cuts from the Federal Reserve. A weaker dollar often fuels rallies in crypto, stocks, and commodities. If this trend continues, major asset classes could see strong gains.
DXY Faces Key Resistance and Support Levels
Technical indicators show strong resistance at $109.30. This level, last tested in July 2022, failed to hold earlier this week. Without renewed buying pressure, further declines could follow. The $107.35 level now serves as critical support. Market sentiment suggests further downside. The Relative Strength Index (RSI) shows more room for selling. A drop below $107.35 could push the dollar toward $106.52.
If selling pressure increases, the next major support stands at $105.98. Fundamental data confirms this bearish outlook. The latest NFP report showed only 143,000 new jobs, missing expectations. A weaker labor market often leads to interest rate cuts. Investors now expect at least two reductions, with a third possible in 2025. Lower rates reduce dollar demand, shifting capital into alternative assets.
Crypto and Other Markets Poised to Benefit
A weaker dollar creates opportunities for crypto, stocks, and commodities. Bitcoin and Ethereum often rally when the dollar declines. Institutional investors shift capital toward assets with stronger growth potential. Stock markets also stand to gain. Lower interest rates make equities more attractive, encouraging risk-taking.
Commodities, including gold and oil, tend to rise as the dollar weakens. This trend could accelerate if the Federal Reserve confirms multiple rate cuts. With momentum shifting, crypto and other markets may enter a strong bullish phase. If DXY breaks below key support levels, a rally could gain even more strength.
