US Dollar Drop: Biggest 6-Month Red Candle Since 1991
The US dollar just had its biggest six-month drop since 1991. The US dollar index (DXY) tracks the dollar’s value against six major currencies. It fell 10.82% from January through June.
Zooming out: long-term US dollar chart
The chart shows the six-month candles of the DXY over the past 50 years. The latest red candle (first six months of this year) measured minus 10.8% from open to close. That’s the biggest six-month red candle since 1991 (–13.1%). The US dollar index also had three big half-year drops in 1987 (-12.9%), 1985 (-15.7%), and 1973 (-14.8%).
Notice the DXY has been in an uptrend since the 2008 financial crisis – with higher highs and higher lows. And now, it’s resting right on the upward trendline in green.
That puts the US dollar index in a potential “bounce zone” for the rest of this year. On the one hand, the last six months was a washout, so the dollar could see a relief rally. On the other hand, it’s trading near long-term price support that’s held since 2008 (the green trendline). And until that support actually breaks, that uptrend is still intact.
Side note: I get all my charts from TradingView, so check out our TradingView guide here.
Why the dollar’s next move is important
The US dollar is the blood of the global financial system. If it rises too fast, it thickens – and global money flow slows down. That can hurt stocks, put pressure on bitcoin, and tighten financial conditions worldwide. A stronger dollar also makes debt more expensive for countries and companies that borrow in dollars – and most countries borrow in dollars. If the dollar rallies, it might also mean the markets are going “risk-off”, and investors are buying US Treasury bonds.
But if the US dollar drops, that blood flows more freely. It often boosts global markets, encourages lending, and makes it easier for money to move around. And for the most part, bitcoin and stocks tend to benefit.
So if you’re wondering what’s next for the global economy, stop worrying about Trump tariffs. Watch the DXY trendline instead.
Check out our full US Dollar Index (DXY) guide here. And grab the PDF guide below to learn how to trade trendlines.
