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Let’s talk about the almighty U.S. dollar today. As the most influential currency in the forex market, it’s no surprise that nearly everyone has their eye on it.

2021 and 2022 were bumper years for the dollar. The currency rose to one of its highest levels and delivered sweet gains to those on the right side. Here’s a look:


Source: Market Traders Institute, SmartTrader

That’s a one-way rollercoaster ride up!

What led to this rise in the last two years?

Well, there are a few reasons behind this…

Interest Rate Hikes: The Fed’s historic interest rate-hiking campaign we saw in 2022 has been a major factor behind the dollar’s rise. The central bank announced five outsized interest rate hikes in 2022 and policymakers have been indicating more hikes in 2023.

Furthermore, unlike the greenback, major currencies haven’t been subject to the same rate-hike policies as the Fed’s. While major countries have raised rates, the Fed has raised them comparatively higher… and faster. And these outsized rate hikes meant the dollar rising against major rival currencies in 2022.

Safe-haven currency: The greenback also has a reputation as a safe-haven currency, which means it’s a go-to choice for investors during times of economic uncertainty or reduced risk appetite. And boy, did we see a lot of that in 2022.

With faltering growth and increased risk aversion, the dollar’s relative reliability made it a safe haven bet for many investors. On top of that, the yen, which is often considered a safe haven asset, lost favor due to Japan’s yield curve control measures and deteriorating trade balance.

Is the dollar’s rally set to continue in 2023?

To answer that, let’s understand where the dollar stands right now and whether it has peaked in its current rally. Here’s some perspective…

If you’re an average retail trader, this is what you’d have seen on your charts for the USD index…


Source: Market Traders Institute, SmartTrader

The problem here is that the price data only goes back to 2001, creating an illusion that the dollar is currently at an all-time high and has peaked its rally.

But the U.S. dollar has been around for much longer than that, and most banks and large institutions have data dating all the way back to the first dollar ever printed.

This time, let’s take a USDJPY chart with data from the 1970s… 



Woah! This paints a completely different picture. 

When we take a look at the real USDJPY chart, which goes back to the 1970s, it becomes clear that the dollar is nowhere near an all-time high. In fact, there’s room for potential upside if the dollar were to revert and move towards the highs seen in the 1970s.

So what could push the dollar higher in 2023?

There are a few things to consider, like the Federal Reserve’s monetary policy, geopolitical changes, inflation, trade sanctions, and the behavior of the housing market.

If these things remain the same as in 2022, we could see the same factors that helped the dollar in 2022 continue to do so this year.

How can traders take advantage of this information?

By understanding their own advantages and disadvantages. For instance, retail traders have the ability to enter and exit the market at their will, while big institutions that trade trillions of dollars have to execute their trades over a longer period.

Retail traders can also benefit from keeping track of key events which may have a major impact on the dollar, like the Fed’s monetary policy meetings or inflation readings, and making informed trades accordingly. It’s also crucial for traders to understand their own risk tolerance and set appropriate stop-loss and take-profit levels.

But we’re not stopping there. Our top analysts have gone through over 50 years of data to come to a crazy conclusion for 2023! 

It’s our biggest call for Q1 with around 9015+ PIPs of potential opportunity trading USD currency pairs. We’re sharing all the data with you in an urgent 2023 USD prediction webinar.

Make sure you’re not left behind. Click here to learn about our prediction in an upcoming LIVE webinar.

Predicted movements expected to last through the end of Q1 2023.

Predictions are not a guarantee of this or any result. Information provided on this prediction is for general information purposes only. We offer no representation or warranty with regard to this prediction. No prediction is personalized or otherwise directed at any individual or particular circumstances. We disclaim and will not accept any liability for losses associated with this prediction.

Please see our full risk disclaimer.

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