The Zimbabwe ZiG currency has done relatively well this year, helped by the ongoing gold price rally, weaker dollar, and the higher interest rates by Zimbabwe’s central bank. ZIG, whose ticker symbol is ZWG, has remained at 26.70 in the past few months, slightly above the January 1 level of 25.6.

Soaring gold price has boosted Zimbabwe ZiG

The first major reason why the Zimbabwe ZiG has jumped this year is that gold price has jumped to a record high of $4,060, up from the January level of $2,600. It has jumped by over 50% in the last 12 months, making it one of the best-performing assets in the market.

The rising gold price has benefited the Zimbabwe ZiG in two ways.  First, it has boosted the dollar value of its gold reserves. Data shows that the gold reserves have now jumped to $900 million from $700 million in June. 

Second, the rising gold price has coincided with higher production in the country. The output jumped to 32.98 tons between January and September, up by 37% from the same period last year. It delivered 4.4 tons in September, and the government hopes that the annual production will get to 40 tons. 

Therefore, the rising gold and platinum prices have contributed to the country’s economic growth. The IMF sees the economy jumping by 6% this year, while the government predicts a 6.8% annual growth.

Good weather and tobacco production

Meanwhile, Zimbabwe has had good weather this year, which has helped it to produce abundant food and tobacco. Data shows that its tobacco production through July was over 340 million kilograms, up from 296 million kilograms in the same period last year.

The rising tobacco production has helped to offset the lower prices. As a result, the country has earned over $1.2 billion in tobacco revenue this year. 

The good weather means that Zimbabwe has reduced its food imports substantially this year. This is in contrast to 2024 when a prolonged drought led to a substantial increase in food imports. 

Zimbabwe interest rates 

The other main reason why the Zimbabwe ZiG has done well is that the central bank has maintained higher interest rates, which are geared towards fighting inflation and supporting the ZiG. 

Zimbabwe’s central bank has boosted interest rates to 35%, much higher than the Federal Reserve’s 4.25%. In theory, the higher rates should translate to more returns in money market funds.

However, unlike in other countries, the higher benchmark rate has not translated to stronger money market fund returns. Data shows that ZiG interest-bearing accounts yield about 6%.

What next for the Zimbabwe ZiG?

The above reasons, together with the weak US dollar, have helped to boost the value of the Zimbabwe ZiG this year. Notably, the spread between the official and black market rate has continued to narrow this year. 

Still, the value of the ZiG remains much lower than the initial 13.56. This was partly because of the 40% devaluation by the central bank in September. This devaluation was primarily to bridge the gap between the official and black market rate. In a report, the IMF recently noted:

“The role of the ZiG in the economy is still limited and monetary policy credibility remains low, as indicated by high dollarization and the elevated parallel exchange-rate premium.”

Looking ahead, the government and the central bank are working to ensure that it is the only currency by 2030. Still, this will be a hard thing to implement as Zimbabwe is primarily a dollar-based economy, with the greenback accounting for over 80% of the transactions. 

Most importantly, Zimbabwe had five currencies in the past few decades. As such, there is still a risk that the ZiG will also collapse as the rest did.

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Pi Network, a crypto project that aimed to be a better version of Bitcoin, has become one of the biggest disappointments of the year as its token has crashed, erasing over $18 billion in value. 

The Pi Network price collapse explained 

Pi Network is a crypto project launched by Nicolas Kokkalis and Chengdiao Fan in 2018 to become a better alternative to Bitcoin in the way it was mined and used. 

Their goal was to ensure that anyone with a smartphone to mine and accumulate the coin. At the same time, unlike Bitcoin, Pi Network would be supported by an ecosystem. It would also be widely accepted by all types of sellers globally. 

Pi Network became a highly popular coin, attracting over 50 million users. Its mobile browser had over 100 million downloads on Android and iOS. These miners, popularly known as pioneers, hoped to accumulate as many tokens as possible and then convert them to cash after the mainnet launch.

Pi Network launched its mainnet in February, with some notable exchanges like OKX, Bitget, MEXC, and Gate listing it. These listings pushed its price from $0.6 to almost $3 within a few days.

However, the listing gains were short-lived as the coin plunged by over 90% to the current $0.2280. The collapse has brought its total market capitalization from almost $20 billion to $2.8 billion today. 

Why Pi Coin price crashed

There are a few reasons why the Pi Network price has crashed after the mainnet launch. First, the coin plunged because of the significant selling by many pioneers as the price crashed. It is common for early crypto investors to dump their tokens after an airdrop or mainnet launch.

Second, Pi Network’s price crashed because of its high inflation, which has seen the amount of tokens in circulation keep rising. Data shows that over 1.2 billion tokens will be unlocked in the next 12 months. 

Also, with less than 9 billion tokens in circulation, over 90 billion more will be unlocked over time. A token normally drops when there is a significant increase in supply and limited demand.

Third, the Pi Network price has plunged because it has become a ghost chain with no real-world utility. No retailer accepts Pi Coin, and no mainstream apps exist in its ecosystem, meaning that it has no utility.

There are other reasons why the Pi Network price has crashed this year, including the lack of major exchange listings after its mainnet launch, claims that it is a scam, and lack of a clear roadmap from the developers.

Can the Pi Network value be saved?

Crypto investors and experts believe that the team can implement some major changes that will boost its price, at least in the near term.

One major remedy would be to improve its tokenomics by introducing a major token burn that reduces the number of all tokens, potentially to 21 billion. The OKB price recently went parabolic after the developers slashed the number of tokens in circulation from over 60 million to 21 million.

Another option would be to ensure that the coin is listed by major exchanges like Binance, Coinbase, and Upbit. An exchange listing would lead to a parabolic move as Pi becomes available to more investors.

Pi Network price would also jump if the team ended its centralization, which currently gives the obscure Pi Foundation too much power. The foundation now holds over 90 billion tokens in hundreds of wallets and is not even audited. As such, changes to distribute its power would likely boost the price.

Other measures that would boost the Pi Network price would be to create a real-world utility for the coin, partnerships with major companies, and solving the underlying KYC verification issues.

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Crypto prices remained on edge on Friday, with Bitcoin remaining below $123,000 and the market capitalization falling by over 1% to $4.23 trillion. This article explores some of the top cryptocurrencies to watch will be Dash (DASH), Zora (ZORA), and Mantle (MNT) that have been highly volatile.

Dash price technical analysis 

Privacy tokens have been in a strong uptrend this year, and are now hovering at their highest point in months. Zcash price has jumped by over 700% from its lowest level this year. Other top coins that have done well are Horizen (ZEN) and Monero (XMR).

Dash is another top privacy token that has jumped in the past few days. It jumped from a low of $20 in late September to $48 this week, its highest point since December last year. 

The Dash token happened after it remained inside the support and resistance levels at $17.70 and $26.25. This consolidation was part of the accumulation phase of the Wyckoff Theory, and the current surge means that it has moved to the markup phase. 

Dash price has moved to the 50% Fibonacci Retracement level. It has also moved above the 50-day and 100-day Exponential Moving Averages, a sign that bulls are in control.

The most likely scenario is that the Dash price will pull back in the coming days. If this happens, it means that the token may retreat and retest the support level at $30. 

Zora price forecast

Zora, a top cryptocurrency in the Base Blockchain industry, has been in the spotlight in the past few months. The token jumped from a low of $0.0077 in July to a high of $0.1462, up by 1,845%. 

Zora price jumped as more users continued joining its platform, which pays users for their social media posts. Recently, however, the coin moved into a bear market as it crashed from a high of $0.1462 in August to a low of $0.041.

Zora price formed the highly bullish falling wedge chart pattern during its recent crash and made a strong rebound after being listed on Robinhood, one of the top American companies.

It rose to a high of $0.093 on Friday, its highest level since August 27. It has moved above the 50-day Exponential Moving Average (EMA), while the Relative Strength Index (RSI), has moved close to the overbought level of 70.

Therefore, the coin will likely continue rising as bulls target the important resistance level at $0.10. A move above that resistance level will point to more gains, potentially to the year-to-date high of $0.1460. A move below the support at $0.05915 with invalidate the bullish outlook.

Mantle price prediction 

Mantle has been one of the best-performing coins in the crypto industry in the past few months as it jumped from a low of $0.5530 in July to a high of $2.8 earlier this week.

The surge happened as Mantle’s role in the crypto industry grew, with the total value locked (TVL) hit $350 million and the amount of stablecoins in the ecosystem moved to over $729 million.

Most importantly, Mantle launched UR a borderless bank that seeks to disrupt the banking industry.

The daily timeframe chart shows that the MNT price has soared in the past few months and recently reached a high of $2.81 and then pulled back, forming a bearish engulfing pattern. Therefore, the coin will likely continue falling as sellers target the key support level at $2.

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Zcash price has staged a strong comeback this month, leading to a substantial short squeeze. The ZEC token has jumped from a low of $34 in August to $280, a 710% increase surge that has pushed its market capitalization to almost $4 billion. 

FOMO and Grayscale are driving the Zcash rally

Zcash is a top cryptocurrency in the privacy space, where it competes with the likes of Dash and Monero.

It does that by having two types of transactions: transparent and shielded. Transparent transactions are similar to Bitcoin in that they are available on a public ledger, while the shielded ones use zero-knowledge (zk) to ensure that transactions are private. 

In shielded transactions, information on the amount of money being sent and the addresses of the senders and recipients are keep hidden from the public view.

The Zcash price has been in a strong uptrend since last year when Grayscale announced the launch of a fund tracking the coin. This fund will allow American investors to invest in it, and possibly opens the door for a spot ZEC ETF filing.

The Zcash price has also jumped as that announcement triggered Fear of Missing Out (FOMO) among investors, which explains why it has continued rising. Data shows that the daily volume jumped by 90% to $1.4 billion, while the futures open interest soared to a record high of over $350 million.

ZEC price has jumped because of the ongoing liquidations of short traders. Daily liquidations soared to $6.7 million on Friday from $4.69 million on the previous day. Altogether, shorts liquidations worth over 50 million has happened this week.

The Zcash price rally has been notable as it happened in the same week that the crypto market crash occurred. Data shows that the market capitalization of all coins has plunged by over $200 billion this week.

ZEC price technical analysis 

There are technical reasons why the ZEC price soared this week. The daily timeframe chart shows that the coin’s price remained in a tight range between January and September. In this period, the token remained inside the resistance at $54 and the support at $28.

As such, there are signs that the token was in the accumulation phase of the Wyckoff Theory, which is characterized by low volume and volatility. The chart shows that the Average True Range (ATR) continued to drop as the volatility plunged.

The accumulation phase is then followed by the markup, which is characterized by high demand and a parabolic move. It is also characterized by the Fear of Missing Out (FOMO) among investors.

Therefore, there is a risk that the ZEC price will crash as soon as it enter the markdown and the distribution phases. Besides, data shows that the coin has become highly overbought, with the Relative Strength Index (RSI) jumping to 80 and the Stochastic moving to nearly 100.

A crash will likely bring the ZEC price to the important support level at $150, which is about 40% below the current level. It could also plunge below $100 as profit-taking intensifies.

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The Japanese yen retreated on Friday as investors watched the new political developments in Japan’s political environment. The USD/JPY exchange rate dropped to 152.62, down from this week’s high of $153.45.

Japanese yen rebounds as ruling coalition collapses

The USD/JPY exchange rate has been in a strong uptrend this week as investors cheered to the recent party elections in which Sanae Takaichi became the leader of the ruling party.

Takaichi has long favored policies similar to those advocated by the late Shinzo Abe, which were known as Abenomics. She favors low interest rates and more stimulus policies to boost the country’s economy.

The risk, however, is that the political situation has changed as the ruling coalition collapsed. In a statement, the Komeito party said that it was leaving the coalition with the Liberal Democratic Party.

While LDP still has the majority analysts believe that she will lack the votes required to push some of her proposals, especially if the LDP party fails to replace Komeito with the Ishin or DPP parties. 

Such deals will likely have concessions, which may prevent her from implementing some of her policies. In a note, an analyst from OCBC said:

“The earlier slump in the yen this week was due to perceived policies associated with PM-to-be Takaichi while markets pushed back on the BOJ hike normalization timeline. Now that they have lost their long-time partner, this suggests she may not be able to push through some of her policies as swiftly, and that the earlier slump in the yen may pare back.”

Focus on the Bank of Japan

The USD/JPY exchange rate also jumped this week because of the ongoing US dollar rebound, with the DXY Index jumping to $99.2 from the year-to-date low of $96.42, where it formed a double-bottom pattern.

Looking ahead, forex traders are focusing on the upcoming Bank of Japan (BoJ) meeting. Most economists expect the bank to maintain rates at the current level of 0.50% as officials embrace a wait-and-see approach.

They also expect the bank to deliver a rate hike in the last meeting of the year as inflation remains higher than the 2% target. The bank may decide to hike so that it can demonstrate its independence from the new political situation.

The other main risk for the USD/JPY exchange rate is that the US government shutdown is continuing, leading to a  prolonged data drought. For example, the Bureau of Labor Statistics did not publish the latest non-farm payrolls data on Friday, and it will not release the latest consumer inflation report next week if the shutdown continues.

USD/JPY technical analysis 

USDJPY price chart | Source: TradingView

The daily timeframe chart shows that the USD/JPY exchange rate has been in a strong uptrend in the past few months, moving from a low of 139.95 in April to the current 152.7. 

It recently moved above the important resistance level at 150, the highest point in August. It also formed a golden cross pattern, which happens when the 50-day and 200-day Exponential Moving Averages (EMA) cross each other.

Therefore, the most likely scenario is where the pair retreats and retests the support at 150.96 and then resumes the uptrend later this year.

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The Schwab U.S Dividend Equity ETF (SCHD) stock price has remained in a tight range this month, even as other broad blue-chip indices like the Nasdaq 100 and S&P 500 soared to a record high. SCHD was trading at $27.28, down from the all-time high of $28.6 and the year-to-date high of $27.75. 

This article provides a forecast for the fund and explores whether it is a good investment to make.

SCHD ETF stock price technical analysis 

The daily timeframe chart shows that the SCHD ETF stock price has rebounded in the past few months, moving from the April low of $23.41 to a high of $27.75. This rebound coincided with the broad stock market rally as investors moved on past Donald Trump’s tariffs, which he unveiled on his Liberation Day.

The ETF has remained above the 50-day Exponential Moving Average (EMA), a sign that bulls remains in control. It also remains above the Ichimoku cloud indicator and the major S/R level of the Murrey Math Lines tool at $26.56. 

The SCHD ETF is slowly forming a bullish flag pattern, which is made up of a vertical and a descending channel. It is now forming the flag section of this pattern. 

However, the risk is that the fund is equally forming a bearish divergence pattern as the Relative Strength Index (RSI) and the MACD indicators have pointed downwards.

Therefore, more SCHD ETF gains will be confirmed if it moves above the upper side of the flag at $27.75, its highest level on August 25. A move above that level will point to more gains, potentially to last year’s high of $28.61.

Earnings and the Federal Reserve 

The main catalysts for the SCHD and other American equity ETFs will be the upcoming earnings season, which will kick off officially next week when companies like JPMorgan and Wells Fargo publish their financial results. These earnings will provide more color about the impact of Donald Trump’s tariffs on corporate America.

Data compiled by FactSet shows that the average earnings growth of the S&P 500 Index is expected to be about 8%, which will mark the ninth consecutive quarter of earnings growth. The most likely outcome is where the earnings growth will be stronger-than-expected, as they have done in the past.

However, the main risk for the SCHD ETF is that about 20% of its companies are in the energy sector, which analysts are a bit pessimistic about. Analysts see three of the five sub-industries – oil & gas equipment & services, integrated oil & gas, and oil & gas exploration and production- expected to report earnings decline. 

Refining and marketing and storage and transportation are expected to report strong numbers. The biggest energy companies in the SCHD ETF are ConocoPhillips, Chevron, EOG Resources, Schlumberger, Valero, and OneOk.

The other main catalyst for the SCHD ETF is the upcoming Federal Reserve interest rate decision in October. Analysts expect the bank to cut interest rates by 0.25% in the meeting later this month as the economic weakness continues. 

Still, the main risk for the SCHD ETF is that it continues to underperform the markets. Its total return this year has been negative compared to SPY’s gains of 14%.

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Covered call ETFs like JEPI, JEPQ, ULTY, and XYLD have done well in the past few years, attracting billions of dollars in assets as investors embraced their high dividends. 

JEPI, the biggest covered call ETF, has attracted over $41 billion in assets, thanks to its 8.3% dividend yield, which is much higher than the S&P 500’s 1.25%. 

Similarly, the JEPQ ETF has gained over $31 billion in assets because of its 10.40% yield. The YieldMax Ultra Option Income Strategy (ULTY) has over $3.3 billion in assets and a yield of 108%. Also, the Global X S&P 500 Covered Call ETF (XYLD) has $3 billion and a dividend yield of 12.9%.

How these covered call ETFs work

JEPI, JEPQ, ULTY, XYLD, and other covered call ETFs have become popular funds among investors because of their high dividend yields.

These funds, which are commonly known as boomer candy, can generate higher monthly returns because of how they are constructed. 

They are actively managed funds that generate a return by using a financial engineering process. The first stage in this is where they accumulate stocks in an index, with the JEPQ ETF buying those in the Nasdaq 100 Index.

JEPI ETF first invests in 131 companies in the S&P 500 Index. After doing that, the fund managers then sell call options on the underlying index. A call option is a contract that gives the buyer the right but not the obligation to buy an asset at a specific price within a certain time.

The call option trade gives it a premium, which usually widens during periods of high volatility. The ETF then distributes the premium and the dividends to its shareholders. 

Are covered call ETFs good investment?

Covered call ETFs have become popular among investors because of their high dividends, which are usually more than traditional funds and what government bonds pay. 

Most importantly, income investors love them because they pay their dividends every month, making them ideal for retirements.

However, the best way to assess an ETF’s performance is not how much money it pays in dividends. One should consider the total return, which includes the stock price performance and the dividends. 

A good example of this is to compare JEPI and XYLD with that of the S&P 500 Index. The benchmark S&P 500 Index has jumped by 14% this year, while JEPI and XYLD have dropped by 1.15% and 5.92%, respectively this year.

The S&P 500’s total return this year is 15%, while the two have returned 5.27% and 1.90%. As such, while the S&P 500 Index investor is receiving less money in dividends, he is benefiting from the price return.

The same is happening with the Nasdaq 100 Index and the JEPQ. JEPQ’s total return this year is 10%, while the Nasdaq 100 Index has returned 18.70%.

Meanwhile, the Coinbase stock has had a total return of 14.5% this year, while the CONY ETF, which has a dividend yield of 142%, has returned just 14%.

Therefore, these covered call ETFs are not good investments as they only benefit the sponsors who charge a higher fee and generate a smaller total return. For example, the CONY ETF has an expense ratio of 1.22%, while XYLD has a ratio of 0.60%. JEPI and JEPQ have a multiple of 0.35%, which are all higher than the VOO and IVV’s 0.03%.

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The SPDR S&P 500 Trust (SPY) ETF has continued to shed assets this year, making it the worst-performing in Wall Street. It has lost over $32 billion in assets, while the Vanguard S&P 500 (VOO) has added over $86 billion. BlackRock’s IVV ETF has added over $28 billion in assets. 

SPY ETF has been overtaken by IVV and VOO

The ongoing SPY ETF outflows have jumped this year and have made it the third-biggest fund in Wall Street. It now has $677 billion in assets, while VOO and IVV have over $762 billion and $701 billion, respectively.

The main reason why SPY has been dethroned is that investors are preferring the cheaper funds. SPY has an expense ratio of 0.09%, meaning that a $100,000 investment will cost just $90 a year in fees.

On the other hand, a similar investment in VOO and IVV will only cost about $30 each. While a $60 difference for a fund with $100,000 in assets is a small one, investors don’t see the need to pay more. They are likely following Morningstar’s advice when it wrote:

“When it comes to fees, VOO charges 0.03%, while SPY charges 0.0945%. The difference may be minimal, but there’s no reason to leave cash on the table. With all else equal, the fund with the lower fee is more aligned with investors’ best interests.”

Another minor reason why investors are dumping the SPY ETF and moving to the VOO and IVV is that the former was launched as a unit investment trust. 

This approach means that managers are prohibited from some basic operations like reinvesting dividends and also use derivatives to equitize cash. As such, investors are opting for the other funds to avoid SPY’s inefficiencies.

The SPY has also shed assets because of the Morningstar rating. While it tracks the S&P 500 Index, the company has given it a silver rating, while IVV and VOO are gold-rated.

S&P 500 Index ETFs have a major risk ahead 

The top S&P 500 Index ETFs have had a strong performance in the past few years as investors have flocked to technology companies like NVIDIA, Broadcom, and Microsoft. 

Therefore, there are concerns that these ETFs may crash once the so-called AI bubble pops in the coming months.

Some analysts and investors have started to warn that the AI industry is in a major bubble that could pop. One major issue is that OpenAI is driving the bubble through its circular investment deals.

For example, the company announced a major deal with AMD this week. As part of the deal, the company will take a stake in AMD, which will then supply thousands of GPUs to fund its operations. 

The company also announced a major $100 billion deal with Nvidia, where it will purchase thousands of GPUs from the company. As such, these deals are likely creating an illusion of demand, where there is none.

Most importantly, OpenAI has now announced deals worth over $1 trillion, funds that it does not have. Also, it is unclear how the company plans to monetize and achieve a return on investment in the near and long time. 

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The Shopify stock price has been in a strong uptrend this year as technology companies soared. SHOP jumped from a low of $69.34 in April to a high of $169.50. This surge has brought its market capitalization to over $213 billion, making it one of the biggest companies in Canada. So, is the highly overvalued company a good investment today?

Shopify stock has jumped as its growth continued

Shopify is a top company that provides e-commerce solutions to retailers and firms in other industries globally. Its main service is a platform that enables users to build e-commerce websites without doing any coding. 

Shopify has gained a substantial market share in the past few years because of the quality of its platform. It also offers more features that other website builders don’t have. 

The company’s business has been in a growth trajectory in the past few years. Its annual revenue jumped from $2.9 billion in 2020 to over $10 billion in the trailing twelve months. 

Most of this growth happened as it continued adding more users to its platform. It also launched more solutions, which helped it to upsell other companies from around the world.

Read more: Shopify shares rise 4% after TD Cowen increases target price

The most recent results showed that the company’s growth trajectory accelerated despite Donald Trump’s tariffs. Its gross merchandise volume jumped from $67 billion to $87 billion in the second quarter of this year.

The quarterly revenue rose by 31% to $2.6 billion, while the operating profit rose to $291 million. Most notably, the company boosted its forward guidance, noting that its revenue would grow at mid-to-high twenties.

Wall Street analysts believe that the company’s third-quarter revenue will be $2.75 billion, up by 27.4% from the same period last year. Its annual revenue is expected to be $11.27 billion, up by 26% from last year.

Valuation concerns remain

The main concern with the Shopify stock is that its stock has always been highly overvalued compared to other technology companies. 

Data compiled by SeekingApha shows that it has a forward price-to-earnings ratio of 92, higher than the sector median of 32. Its trailing multiple is 187, also higher than the industry median of 33. On a non-GAAP basis, the company has a forward multiple of 113 and a long-term multiple of 126. 

These numbers mean that an investor who bought the whole company would take many years to break even, 

However, many investors use the rule-of-40 multiple to value the company. In this, they look at its revenue growth and compare it with the margins. 

Shopify has a forward revenue growth of 25% and a profit margin of 23%, giving it a multiple of 48%, making it a relatively cheap company to buy. 

Also, it is worth noting that Shopify has perennially been an overvalued company.

Shopify stock price analysis

SHOP stock chart | Source: TradingView

The daily timeframe chart shows that the SHOP stock price has been in a strong rally in the past few months. It has jumped from a low of $69 to $169 earlier this month. 

The stock then pulled back and is now trading at $160. It remains above the 50-day and 100-day Exponential Moving Averages (EMA).

Therefore, the stock will likely bounce back as traders wait for the upcoming earnings. If this happens, it will rebound and potentially hit the important milestone at $200.

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The relentless US Dollar Index (DXY) sell-off experienced earlier this year has faded, and many hedge funds are betting in its comeback in the fourth quarter. The DXY Index was trading at $98.7 on Thursday morning, up from the year-to-date low of $96.24. 

Why the US Dollar Index has plunged this year 

The US Dollar Index has been in a strong downward trend this year. After peaking at $110 earlier this year, the index plunged to a low of $96.22.

This plunge happened after Donald Trump was inaugurated as the US president earlier this year. In interviews, he mentioned that the strong dollar was affecting the economy and suggested that he favored it to be weak, a move that would benefit exporters.

Some of Trump’s policies have led to a weaker US Dollar Index. For example, he has considered firing Jerome Powell from his position as the Federal Reserve chairman. He also recently fired Lisa Cook, a process that is currently in the court system.

The lack of Fed independence would have a negative impact on the US Dollar. A good example of this is the Turkish lira, which has been in a relentless sell-off for decades because of Erdogan’s power in firing and appointing the head of the CBRT.

The US Dollar Index also plunged as central banks moved to other assets. A good example of this is gold, which has been in a relentless bull run such that it has crossed the important resistance level at $4,000 this week.

The DXY index also plunged after Trump implemented substantial tariffs against other countries. It has dropped by nearly 6% after Donald Trump’s Liberation Day tariffs in April this year. 

Most recently, it dropped after the Federal Reserve slashed interest rates in the last meeting. It cut rates by 0.25% in the last meeting.

Why the DXY Index may rebound soon

The DXY Index may rebound soon for two main reasons. First, the options market shows that hedge funds are favoring the dollar as they bet that the ongoing rebound against most peers will extend into the end of the year. 

For example, the EUR/USD put options expiring by the end of the year, which rise in value when the currency falls, have had three times more volumes than calls in the past few days. The same view has happened on other currencies like the sterling, the New Zealand dollar, and the Australian dollar. In a recent note, an analyst said:

“Most of the dollar call buying has been in the G-10 majors and the jumps in front-end risk reversals in these currencies are a good indicator of the turn in demand.”

The daily timeframe chart shows that the US Dollar Index has formed a double-bottom pattern at $96.41 and has rebounded to the current $98.72. A double-bottom is a highly common bullish reversal pattern in technical analysis. 

The index has also jumped above the 50-day Exponential Moving Average (EMA), while the Relative Strength Index (RSI) has pointed upwards. 

Therefore, the most likely scenario is where the index continues rising a bulls target the key resistance at $100.16, the highest point in August. This price coincides with the neckline of the double-bottom pattern and the lowest point in September. 

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