In early 2025 we’ve seen two classic wedge patterns on two of the market’s most watched charts: a falling wedge on the U.S. Dollar Index (
DXY) and a rising wedge on the S&P 500 ETF (
SPY). Alone each tells its own tale—but together they sketch a tug‑of‑war between a fading dollar and resilient equities.
The Falling Wedge on DXY
A falling wedge in a downtrend signals waning bearish momentum and often precedes a bullish reversal once price breaks the upper trendline.
The Rising Wedge on SPY
A rising wedge in an uptrend is classically a bearish reversal pattern—a breakdown below the lower trendline confirms sellers are gaining control.
A Converging Reversal
Given the well‑known inverse correlation between the dollar and most assets, it’s noteworthy that both asset classes are flashing signs of a reversal. Taken together that makes a compelling argument.
DXY) and a rising wedge on the S&P 500 ETF (SPY). Alone each tells its own tale—but together they sketch a tug‑of‑war between a fading dollar and resilient equities.The Falling Wedge on DXY
A falling wedge in a downtrend signals waning bearish momentum and often precedes a bullish reversal once price breaks the upper trendline.
The Rising Wedge on SPY
A rising wedge in an uptrend is classically a bearish reversal pattern—a breakdown below the lower trendline confirms sellers are gaining control.
A Converging Reversal
Given the well‑known inverse correlation between the dollar and most assets, it’s noteworthy that both asset classes are flashing signs of a reversal. Taken together that makes a compelling argument.
Nota
Breakouts in both wedges have been confirmed. Let's see if they're false breakouts in the coming weeks.
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