The End of the Dollar De dollarization Explosed Technical Analysis

Hey folks, welcome to verifiedinvesting.com. My name is Gareth Soloway, Chief Market Strategist here. Now in today's video, we're going to deep dive back into the currency market. What the heck is going on with the dollar? What about other currencies like the pound, the aussie dollar, the euro, etc? We're going to look at these charts because based on everything I'm seeing, it looks like the long-term play of de-dollarization, moving away from the U.S. dollar as a reserve currency, is firmly in place. Now let's jump into the DXY here and take a look. If we look at the DXY, you can see again, remember folks, we're still in a situation with Iran where the U.S. is in conflict there. The Strait of Hormuz is closed. And look at how the dollar remains in its weakest point in really the last you could arguably say since 2022. And so again, the dollar, even with the conflict going on, has stayed below this level on the DXY. Now the DXY, remember folks, is the dollar against a basket of currency. So it gives us a general viewpoint of how the dollar is behaving against a lot of currencies, the main currencies to be fair. All right. So what we see here is very clearly we had this breakout in late 2022 or kind of mid-2022. And then from that point, we held this zone about a 101.50 to 100 on the DXY as technical support. We hammered it over and over again. Finally, in April of 2025, we broke below it. An attempt was made to get back above, failed. And then look at how the dollar has been unable to get through there, even in spite of the U.S. war with Iran and the Strait of Hormuz being closed. Now, one of the things that's catching my eye is looking at this. So we very clearly see this pivot high, right? And you can even see it right over to here. So you have this area connecting through this high, through here and through here. And look, the dollar on this past Friday, on Friday, May 8th, closed below. Now closes below do not mean breakdowns, right? We need to see more. We need to see more from the chart. But it certainly, to me, is a warning sign that even in spite of geopolitical tension and war, the dollar is still remaining exceptionally weak. And that's a guide, right? It's not telling us for sure that the dollar is going to collapse. And I want to be clear, de-dollarization, the move away from the U.S. dollar as a reserve currency, literally will take decades to complete, OK? And again, if you look historically at other major reserve currencies, I mean, it doesn't happen overnight. I think people expect that. It's one of the reasons why I still think gold and silver can go lower in the near term, but I'm hugely bullish long term because ultimately the dollar can chop around and those precious metals can go lower near term. It's the longer term trend that I think the precious metals are extremely bullish. And I think people get confused and say, oh, well, if you're saying the dollar is going down, de-dollarization, then the metal should go up. You're right. Your time frame is just a little misguided. That's all. That's all it is. OK, so what we see here on the DXY is a break below this level that, again, if it confirms means we could be headed down to 95 on the DXY, which would be our lowest point since 2021. Now, once we get down in this range, we will start to find some decent support, right? I mean, there is some support right down in that range, 95 to 94. You can see the pivot points over here, this little area, and we broke up. We kind of bounced before having this big bull run in the US dollar. But right now, this is looking more and more like by later this year, we will test the 95 level on the DXY. Now, in general, that should be very bullish for other currencies. Well, bullish being a relative term, right? It means the other currencies like the euro, the pound, the Aussie dollar, the Canadian dollar, those should generally strengthen against the US dollar. And that is what the charts are saying. And we'll look at those charts in just a minute. But essentially, if you look at this also longer term, there's a bigger trend line. So I'm going to get rid of this. And I want to show you guys this trend line here. So you have this trend line, which is basically what we're holding now, right? And so you can see we have this line going back to 2014 connecting through the lowest point here. All right. Notice how no there's no pierce of this line. This is the only line here until we get over to this area and you violated it by going below. Then you did bounce. But it tells you that this has now been weakened. You got close. You got closer. You violated it. Bounced. Now, my guess is the next time down, this is now around 96. I think we break it and we retest 95 and we start to have a bigger breakdown on the dollar. So again, 95 short going to be some support. I still think the dollar is going as low as 88 to 90 on the DXY by late this year, early 2027. And that spells again, more trouble for the U.S. economy. Now, why would the dollar be weakening? Well, number one, the U.S. has really been bullying other countries quite a bit tariff wise, geopolitically wise, et cetera. And it's making other countries be very tentative and nervous about holding dollars as their main currency, because the more the dollars that country holds, believe it or not, the more power the reserve currency country, a.k.a. the United States, has over them. And so ever since we've seen this kind of move to isolationism, if you will, by the U.S. kind of saying, hey, we're going to move away, et cetera. We're going to focus on the U.S. Other countries are saying, oh, they're going to do what's in their best interest, which in all fairness makes sense for any country to do. But it also makes them wary about letting that country have too much power over them. Very weird stuff, but very interesting to analyze. All right. So let's go to some of these currencies. Let's go to the EURUSD here. And if we look at this again, I've shown you guys this chart before. We'll flip over to the weekly chart. This is already broken out. This is beautiful, bullish consolidation. We should see a continued upward move on the euro against the dollar. If we look at the GBPUSD here, same general thing. I mean, look at this, guys. Great breakout. We retested. And now this is almost forming like a little inverse head and shoulders here. You guys see that on the charts? I'll draw it in. Shoulder, head, shoulder for another break to the upside. So British pound should continue to strengthen against the dollar as well. We can look at the Canadian dollar, Canadian to the USD here. And if we look at this, this is borderline breaking out. And I still think you have an inverse head and shoulders here on this, which is really bullish for the Canadian dollar here as well. If you can break out above this like 74, 75 cent range right here, you get a big move up. Probably the measured move is at least 80, maybe even 82. That's very bullish on that chart. And we can even look at the Aussie dollar, right? AUDUSD here. And we can see, look, this is actually amazingly strong. Of all of the charts, this one looks the strongest to me as it's broken up significantly versus most of the other ones are kind of chopping sideways. They haven't yet gone like this. The Aussie dollar has already moved sharply higher. Now, the only currency that continues to kind of look a little weak to the US dollar or comparatively is the yen, which makes sense again, because if you think about the yen and their debt to GDP, I mean, really, they are in a tough spot. They're, again, putting themselves in this constant money printing. And that can't go on forever. We know that. We know that debt, eventually the markets will call in that debt. Even in the US, they're going to do that. It just could be years away. We don't know. But if we look at the JPYUSD here and we bring this chart up, you can see, again, this chart remains very weak. It is starting to inch up a little bit against the dollar here. But nonetheless, I mean, really look at look at the performance. I mean, we're dead lows here going back to I mean, you're basically going back to the weakest point on the yen since 1990. Now, listen, is it possible the yen could also bounce? It could be because there is support here. So maybe the yen is even ready to strengthen against the dollar. But I guess the point is, is that the other charts have all broken out. The yen has found support. There's a big difference there, right? It's one thing to be at support. OK, that's good. The other charts have all broken out, which are clear signals that they are going to strengthen. So this is the currency update that I wanted to get you guys. I do think it's fascinating to watch. It's not the most exciting necessarily on a day to day basis. But to understand the macro implications, the long term implications of what's going on is absolutely intriguing. And every great economist should be aware. You guys have a great rest of your day. I'll talk to you soon. Take care.