Summary of "What’s Next for the US Dollar After the 'Freedom Trade' Surge? – DXY Outlook"

Author: Elior Manier

Date: January 7, 2026

Overview

The article discusses the current state and future outlook of the US Dollar Index (DXY) following a significant correction from its peak in November 2025. The author notes that the dollar has been experiencing volatility and a lack of clear direction, particularly after a challenging year in 2025.

Market Context

After reaching a peak of 100.00, the US Dollar underwent a 10% correction, settling into a range between 98.00 and 100.00. The narrative of dedollarization, which gained traction in 2025, is being reassessed as the US economy continues to outperform other economies, and the Federal Reserve remains hesitant to cut interest rates.

Recent Developments

The article highlights a recent surge in demand for the US Dollar, attributed to geopolitical events, including the capture of Venezuelan leader Maduro. This has led to a perception of renewed strength in the US, both economically and militarily, which could further bolster the dollar's position as a reserve currency.

Technical Analysis

The author provides a multi-timeframe analysis of the DXY, indicating that the dollar has maintained its range between 97.00 and 100.00. The recent price action suggests a potential for an upside breakout, especially if certain resistance levels are breached. Key resistance levels include:

• 98.50 to 98.80 (Intraday Pivot Zone)
• 99.25 to 99.50 (Pivot turned Resistance)
• 100.00 to 100.50 (Main resistance zone)

Support levels are identified at 98.00 and the December lows around 97.75.

Future Considerations

The article emphasizes the importance of monitoring geopolitical developments and economic indicators, such as labor market conditions and inflation data, which could significantly impact the dollar's trajectory. The upcoming Non-Farm Payroll (NFP) report is highlighted as a critical event to watch.

Conclusion

In summary, the US Dollar is at a pivotal point, with potential for both upward movement and continued volatility. Traders are advised to remain vigilant and responsive to market signals as the situation evolves.

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