Rare crossover on the dollar index: the 39th Golden Cross signal rekindles focus on the technical rebound

The Technical Signal That Sparks the Debate

At the end of the December 19, 2025 session, the US dollar index recorded a significant technical event: the 50-day moving average crossed above the 200-day moving average, generating the well-known Golden Cross signal. According to Bank of America Merrill Lynch analysis, this is the 39th occurrence of this phenomenon since 1970, a fact that cannot be ignored by those following the evolution of global currency markets.

The peculiarity of this signal lies in its nature as a medium-term trend reversal indicator. When the short-term moving average crosses above the long-term moving average, the market message is clear: the recent average cost is accelerating upward relative to the historical cost, signaling an accumulation of buying pressure. However, the predictive value of such a signal is not automatic—it depends on the context in which it appears.

The Surprising Numbers: When Context Changes Everything

Here emerges a crucial detail that distinguishes the current dollar situation. Not only has the Golden Cross appeared, but simultaneously, the 200-day moving average was in a declining phase. This combination is particularly rare: it has occurred only in the 16th time since 1970 that the dollar index shows a Golden Cross in a context where the long-term moving average is in decline.

Historical data provide an encouraging indication for those speculating on a rebound. When the Golden Cross occurs under these specific conditions, the probability that the dollar index will rise over the next 15, 25, 35, and 60 trading days reaches 80%, based on 12 increases out of 15 previous historical cases.

Looking at the broader statistical profile, after a “standard” Golden Cross, the probability of the dollar index rising over the next 20-60 days of trading (roughly 1-3 months) ranges between 68% and 79%. The average observed increase was about 1.22%, with a median rise reaching 1.40%. These numbers, repeated over 55 years, suggest that the market is viewing the first quarter of 2026 as a potentially favorable window for the dollar.

A relevant historical reference is 2004, when a similar configuration occurred. In that case, the dollar index experienced about six months of lateral consolidation with increased volatility, before being hit by an inverse “Death Cross.” The message is clear: the positive signal does not guarantee a linear path but rather potential turbulent phases.

The Domino Effect on Major Global Assets

When the dollar index shows significant technical trend changes, the impact tends to propagate to other asset classes. Historical correlations reveal interesting patterns:

Crude oil proves to be the most responsive asset, especially in scenarios of a Golden Cross “in a weak context,” with a historical probability of rise at 100%. This positive correlation demonstrates how sensitive the price of black gold is to dollar index movements.

S&P 500 exhibits a more complex dynamic. US equities do not immediately follow the positive technical signal on the dollar but tend to strengthen only after more than a month has passed. This delay could reflect the time needed for the market to absorb the initial implications of a possible US currency strengthening.

Traditional safe-haven assets like gold and US Treasury yields do not show unambiguous directions, suggesting that with expectations of dollar strengthening, these instruments might face a complex competition between bullish and bearish forces.

The Technical vs. Fundamental Challenge

The technical picture of the dollar index has issued a positive signal, but the macroeconomic context remains complex, and views among financial institutions do not fully converge.

On one side, DBS Bank in its December 2025 report noted that the lateral consolidation of the dollar index between 96.50 and 100.30, recorded since June 2025, could represent an “extended bottom.” According to this interpretation, the technical outlook for the dollar index is now decidedly bullish. If the price surpasses the key resistance at 100.26, further upside toward 101.55-101.98 could be on the horizon.

On the other side, macroeconomic analyses express caution. Goldman Sachs, in its mid-2025 report, highlighted that the dollar faces structural pressures due to policy uncertainty in the US, the trend of global capital diversification, and fiscal concerns. According to this view, the dollar’s traditional “safe-haven” function has weakened considerably, and the US currency is increasingly taking on characteristics of a “risk currency,” with a cycle of weakness that could persist.

UBS also anticipates continued dollar weakness into Q4 2025, citing expectations of further rate cuts by the Federal Reserve and weakness in the US labor market.

The Probabilistic Value of the Signal for Investors

It is important to remember that moving averages are lagging indicators by nature. The Golden Cross signal often confirms a trend change that has already occurred rather than predicting it with precision. No single technical indicator provides a universal solution.

However, the core value of this rare configuration of the dollar index lies in its probabilistic meaning. From a statistical perspective, over the next 20-60 trading days (coinciding roughly with the first quarter of 2026), the probability of a technical rebound of the dollar is increasing, especially considering that this Golden Cross belongs to a “weak context” type that has historically shown superior performance.

Crucial Observation Points for the Coming Months

The final direction of the dollar index will be the result of the clash between the technical impulse—the probabilistic rebound suggested by the Golden Cross—and macroeconomic fundamentals. These include the Federal Reserve’s monetary policy path, the growth differential between the US and other economies, and global geopolitical risks.

For market participants, the crucial significance of this signal is to indicate a potential rotation in asset allocation. If the dollar strengthens according to historical probabilities, crude oil and US equities (with delayed onset) will be the correlated assets to monitor closely.

Two levels will be particularly significant as observation points: the key support near 97, the breach of which to the downside could trigger further declines toward 90/87, and the key resistance at 100.26, whose upward break could confirm the continuation of the dollar’s technical rebound toward higher zones. These will serve as essential markers to assess whether the technical signal will translate into a sustained bullish trend or remain confined to a tactical correction within a broader bearish trend.