On December 19, 2025, a key 'Golden Cross' signal appeared on the US Dollar Index technical chart.

What is even more special is that this golden cross occurred against the backdrop of a weakening long-term trend line, marking the 16th such rare signal since 1970. Historical data shows that such technical patterns often indicate a strengthening of the US Dollar in the following months, having a chain impact on major assets such as US stocks and crude oil, providing important clues for the market landscape in early 2026.

1. The 39th 'Golden Cross' appears

After the market closed on December 19, 2025, the US Dollar Index triggered a closely watched technical signal on its technical chart: the 50-day moving average crossed above the 200-day moving average, forming a bullish pattern known as the 'Golden Cross'.

● Essence of the signal: This signal is regarded as a mid-term trend reversal indicator in the market, based on the fundamental logic that the short-term moving average crossing above the long-term moving average indicates that the recent market average cost is rising faster than the long-term cost, suggesting that buying power is gathering and the trend may shift from weak to strong.

● Historical statistical significance: According to the statistical team of Bank of America Merrill Lynch, since 1970, this is the 39th occurrence of the 'golden cross' signal for the dollar index.

Historical backtesting indicates that the appearance of this signal is not just random noise. The probability of the dollar index rising within 20 to 60 trading days (about 1 to 3 months) after the signal appears is between 68% and 79%. Among these, the highest probability of rising is reached at 35-40 trading days and after 60 trading days, at 79%.

During this period, the average increase of the dollar index is about 1.22%, and the median increase is even higher, at about 1.40%. This statistical pattern provides historical evidence for a potential technical rebound of the dollar in the first quarter of 2026, although there are often seasonal weaknesses in the market at the end of the year.

Two, 'weak golden cross' in a downward trend

The reason this 'golden cross' has drawn special attention from the market is not only due to the signal itself but also because of the special market environment in which it occurred.

● Rare technical background: When this golden cross occurred, not only was the short-term moving average crossing above, but more importantly, the 200-day moving average itself was also in a downward trend. This is defined as a 'very rare type'—this is the 16th golden cross to appear during a downward 200-day moving average since 1970.

● Stronger historical implications: The historical performance in this special context is stronger than ordinary golden cross signals. Data shows that when a golden cross appears simultaneously with a downward 200-day moving average, the probability of the dollar index rising in the subsequent 15, 25, 35, and 60 trading days is as high as 80% (i.e., 12 out of 15 historical occurrences were up).

● Historical reference and risk: The last occurrence of a similar double moving average downward golden cross was in 2004. At that time, the dollar index experienced about six months of sideways fluctuations, and market volatility significantly increased, with golden crosses and the opposite 'death cross' appearing in quick succession. This suggests to investors that although the current signal indicates a high probability of rising, it does not necessarily represent a smooth upward trend; market fluctuations are also possible. Analysis also points out that the current dollar index is testing the key long-term trendline support around 97. If it breaks down, it may open up further downside space to the 90/87 area.

Three, the chain reaction on US stocks, crude oil, and other assets

As the pricing anchor for global assets, potential changes in its technical trend often produce spillover effects, affecting the performance of other major asset classes. Historical data reveals the following correlations:

As can be seen from the table:

● Crude oil is the most responsive asset, especially after the appearance of this special type of golden cross, with a historical rising probability of 100%, showing a strong positive correlation.

● Delayed reaction of US stocks: The S&P 500 index does not immediately follow but tends to strengthen more than a month later, which may reflect the market's digestion process of the initial impact of a stronger dollar.

● Divergence of safe-haven assets: Gold and US Treasury yields have not shown a clear direction, suggesting that traditional safe-haven assets may face complex long and short battles under expectations of a stronger dollar technically.

Four, the interweaving of technical signals and macro realities

Although historical technical patterns have sent bullish signals, the current fundamental environment facing the dollar is complex, and there are divergent views among market institutions, requiring comprehensive consideration by investors.

● Supportive viewpoint from the technical perspective: In addition to Bank of America Merrill Lynch, other institutions have also noted the positive changes in the dollar's technical outlook. DBS Bank pointed out in its December 2025 report that the dollar index has formed a consolidation range between 96.50 and 100.30 since June 2025, which may be an 'extended bottom,' and believes that the dollar's technical outlook has turned bullish. They noted that if the dollar index can break through the key resistance at 100.26, it may further rise to the 101.55-101.98 area.

● Macro constraints: Meanwhile, numerous macro analyses indicate that the dollar faces structural pressures. Goldman Sachs pointed out in its mid-2025 report that due to three major obstacles—uncertainty in US policy, the trend of global capital diversification, and fiscal concerns—the dollar's 'safe-haven attribute' has significantly weakened, behaving more like a 'risk currency,' and its weakening cycle may continue. UBS also predicts that in the fourth quarter of 2025, influenced by expectations of US interest rate cuts and a weak labor market, the dollar will continue its weakening pattern.

● Rational perspective on technical signals: Market experience reminds that no technical indicator is a 'foolproof holy grail.' Moving averages are essentially lagging indicators, and golden cross signals often confirm changes in trends that have already occurred, rather than providing precise foresight. Investors should avoid blindly following a single signal and instead make judgments based on a broader fundamental context.

Five, the game of the key window period

In summary, the rare 'golden cross' of the dollar index at the end of 2025 undoubtedly injects new variables into the market.

● Core insight of the signal: The core value of this signal lies in its probabilistic advantage, indicating that the possibility of a technical rebound of the dollar in the first quarter of 2026 (the next 20-60 trading days) is increasing, especially considering that this golden cross belongs to the historically higher win rate 'weak background' type.

● Interweaving of long and short factors: However, the ultimate direction of the dollar will result from the interplay of multiple forces between technical and fundamental aspects. The rebound momentum provided by the technical side will directly counterbalance the fundamental factors such as the Federal Reserve's policy path (timing and magnitude of interest rate cuts), growth differentials between the US and non-US economies, as well as global geopolitical risks.

● Significance for investors: For market participants, the more important significance of this signal is that it suggests potential rotation direction for asset allocation. Historical patterns show that if the dollar is likely to strengthen, crude oil and lagging US stocks might become correlated assets worth watching. At the same time, investors should closely monitor the breakthrough situation of the dollar index at the key support around 97 and the key resistance around 100.26, which will be an important observation point to determine whether the technical rebound can unfold smoothly.

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