Equilon FXThis article preserves the desk’s published view at that time. Prices, market assumptions and trade status are historical statements, not current guidance or independently verified performance.
DXY is at 105.20. It's been there, give or take 60 pips, for three weeks. Whichever side it breaks decides the next two months in G10 FX.
Why 105 matters
105 is the level where the post-2024 dollar uptrend either continues or rolls over. It was support in 2024. It was resistance in mid-2025. It became the pivot. Now it's the line being tested in both directions.
A daily close above 106 confirms continuation. A daily close below 104 confirms reversal. Anywhere in between is noise.
What a break above 106 looks like
EUR/USD: retests 1.0700. Likely overshoots to 1.0640 on positioning unwind.
GBP/USD: breaks 1.26 cleanly, targets 1.2480 within two weeks.
USD/JPY: finally clears 154 with conviction. Becomes a hold-to-156 trade. The trigger we've been waiting on for the structural short stops being relevant — until 156 prints.
USD/CAD: breaks 1.38, targets 1.3950. Oil correlation breaks down temporarily.
AUD/USD: loses 0.66 again, fades to 0.6450.
What a break below 104 looks like
EUR/USD: clears 1.09, targets 1.1050. The pair has been compressed for so long the move could be sharp.
GBP/USD: breaks above 1.28, targets 1.2950.
USD/JPY: here's the interesting one. Below 104 DXY, the structural short on yen finally gets its trigger. 151.50 falls. We get the trade we've been waiting on for three months.
USD/CAD: continues lower toward 1.3350.
AUD/USD: clears 0.6700, opens 0.68.
The desk's positioning
We're flat on direction-of-DXY. Carrying a long EUR/CHF (separate macro thesis) and patient on the USD/JPY short. No position size committed to either DXY direction until the break is confirmed.
The mistake to avoid
Don't pre-position. The biggest losses of the year come from "I know which way it's going to break, I'll get in early." The market punishes that more reliably than almost anything else. Wait for the close. Take the trade after.
What's the catalyst likely to be?
The path of least resistance is a Fed-driven move. CPI on Feb 18 and Powell on Feb 24. Either of those events is plausibly the catalyst. Until then, the desk waits.
Educational only. Not investment advice. Read the full risk disclaimer.