Trend Signal Now: Coils & Currencies

Wednesday, June 25, 2025

Welcome to The Strazza Letter, a free note with market insights from me, All Star Charts Chief Market Strategist Steve Strazza.

The team and I have been digging through our currency charts today, trying to figure out if we should trust these new lows in the Dollar Index.

And the truth is, there is plenty we could say about dollars right now, but I don't think it would help.

The Dollar Index is going to go in the opposite direction of these bull flags in EUR and GBP.

It's really that simple.

And as far as other currencies go, I think we can expect them to follow the majors. Some of them are already breaking out.

Remember, the major developed currencies started trending well against the dollar first, and then emerging currencies gradually followed.

I expect that intermarket cadence will continue during the next wave of dollar weakness.

And it looks like it already is. Here's the Euro and Pound resolving their coils higher against USD:

Both of these currencies ramped to fresh multi-year highs in April and have been consolidating in continuation patterns ever since.

This action reminds me of some of the bull flags we've been trading in the equity market. The essence of the patterns is the same.

And guess what— the vast majority have resolved higher.

I don't expect it to be any different for EUR and GBP here. They both appear to be making decisive resolutions as we speak, going out at fresh cycle highs today.

If these breakouts remain valid, these currencies are on a path to retest their 2021 highs.

And if that's happening, DXY is making a fresh leg lower and confirming this massive top.

Of course, there is a chance these coils fail and resolve lower. In that case, look out for a counter-trend rip from DXY. But, it's not the bet I'm making based on the information we have today.

These breakouts look solid. I trust them.

And I think the implications are the same as usual: strength from commodities, commodity stocks, and international equities.

I think rates are also due to catch lower under this scenario, and that should bode well for interest rate-sensitive areas of the market.

So it's all about those bull flags. If they do what most of the bull flags are doing out here—look out for lower dollars… and buy the things that do best in a weak dollar environment.

That's it. That's the currency market playbook for now.

We've written a lot about our favorite currencies and the related international equity vehicles recently.

Steve Strazza | Chief Market Strategist, All Star Charts

All Star Charts emails are a financial publication of general circulation and only offers impersonal advice, not tailored to individual needs of a specific client or group. Any comments or statements made herein do not necessarily reflect those of All Star Charts or its affiliates (collectively, "All Star Charts") and do not constitute buy or sell recommendations. Unless specifically indicated, this message is not an official confirmation of any transaction. The contents of any email communications to or from All Star Charts may be monitored or reviewed at All Star Charts's discretion. All Star Charts accepts no responsibility for any loss or damage arising in any way from the use of this transmission and any attachments; it is the responsibility of the recipient to ensure that they are virus free. If you reply to this email, please note that we are a public investor and do not want any material non-public information. We do not agree to keep confidential any information you provide and do not agree to any restrictions on our trading activity, except pursuant to a written confidentiality agreement executed by All Star Charts.

Want to change how you receive these emails? You can manage your preferences here

unsubscribe