The END of the Dollar? De-dollarization EXPOSED! (Technical Analysis)

Key Concepts

• DXY (US Dollar Index): A measure of the value of the US dollar relative to a basket of foreign currencies.
• De-dollarization: The long-term global trend of reducing reliance on the US dollar as the primary reserve currency.
• Technical Analysis: Using chart patterns (support, resistance, trend lines, and formations like "inverse head and shoulders") to predict future price movements.
• Geopolitical Risk: The impact of international conflicts (e.g., US-Iran tensions) on currency valuation.
• Reserve Currency Status: The role of the US dollar as the dominant currency held by central banks globally.

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1. Analysis of the US Dollar (DXY)

Gareth Soloway argues that the US dollar is exhibiting structural weakness, evidenced by its inability to rally despite significant geopolitical tensions, such as the conflict with Iran and the closure of the Strait of Hormuz.

• Technical Breakdown: The DXY broke below a critical support zone (101.50–100) in April 2025. Subsequent attempts to reclaim this level have failed.
• Trend Line Analysis: A long-term trend line dating back to 2014 has been violated and retested, signaling a weakening trend.
• Price Targets: Soloway projects a move toward 95 in the near term, with a potential long-term decline to the 88–90 range by late 2026 or early 2027.
• Key Statement: "It’s a warning sign that even in spite of geopolitical tension and war, the dollar is still remaining exceptionally weak."

2. Drivers of De-dollarization

Soloway identifies two primary drivers for the shift away from the US dollar:

• Geopolitical Isolationism: The US has increasingly utilized tariffs and geopolitical pressure, causing other nations to view the dollar as a tool of leverage that threatens their sovereignty.
• Risk Mitigation: Countries are becoming "tentative and nervous" about holding large dollar reserves, fearing that the US will prioritize its own interests at the expense of its partners.

3. Performance of Other Major Currencies

Soloway provides a comparative analysis of various currencies against the USD, noting that most are showing bullish technical setups:

• EUR/USD (Euro): Currently in a "bullish consolidation" phase on the weekly chart, suggesting continued strength against the dollar.
• GBP/USD (British Pound): Displays an "inverse head and shoulders" pattern, a classic technical indicator of a trend reversal to the upside.
• CAD/USD (Canadian Dollar): Borderline breakout; if it clears the 74–75 cent range, it could see a measured move toward 80–82 cents.
• AUD/USD (Australian Dollar): Identified as the strongest performer among the group, having already moved sharply higher compared to the sideways movement of other currencies.
• JPY/USD (Japanese Yen): Remains the weakest currency, currently at its lowest point since 1990 due to high debt-to-GDP ratios and persistent money printing. While it is at a support level, it lacks the clear breakout momentum seen in other currencies.

4. Precious Metals Perspective

Soloway addresses the common confusion regarding the relationship between the dollar and precious metals:

• Short-term vs. Long-term: While he expects the dollar to weaken (which is historically bullish for gold and silver), he warns that precious metals may experience near-term volatility or declines.
• Clarification: He emphasizes that investors often misinterpret his long-term bullish stance on metals as an immediate signal, failing to account for the "choppy" nature of market transitions.

5. Synthesis and Conclusion

The video concludes that the global financial landscape is undergoing a slow but firm transition away from US dollar hegemony. While de-dollarization is a multi-decade process, the current technical charts for the DXY and major foreign currencies suggest that the dollar’s dominance is waning. Soloway advises that while daily market movements may seem mundane, the macro-level shift is a critical development for any economist or investor to monitor, as it carries significant implications for the future of the US economy.