The US Dollar just broke down harder than expected, and that’s instantly fueling the upside momentum in metals.

Gold is holding above a major psychological level, while silver is going full “no brakes” mode after clearing key barriers. What’s next? 

USD Index (DX.F): Bears Delivered the Move Fast 

We’ll begin today’s Lab Note with a quote from Jan. 21:

“(…) another push lower could be right around the corner.

First downside target? At least a retest of yesterday’s low.

If bulls don’t step in there, the next bearish destination becomes the next major support zone based on the October 6, 2025 upside gap (97.41–97.64) + the 61.8% Fibonacci retracement. At this point, it is worth noting that this important support zone already stopped sellers twice in December, therefore, it’s one of those “watch it like a hawk” areas in the near term. (…)”

Looking at the daily chart, we see that our bearish scenario played out cleanly, and it played out early. 

From today’s perspective, we see that the bears had no problem pushing DX.F lower already during Friday’s session. Even though we got a small bounce after the daily low, Friday still closed below the Dec. 24 low, and… that detail matters - because it confirmed weakness right into the weekend. 

Then Monday added fuel to the fire: Thursday’s bearish engulfing pattern, a fresh Friday’s bearish gap, and active sell signals triggered a sharp lower open during the Asian session. The result? A large bearish gap that dropped the dollar straight into the next major support zone around the 78.6% Fibonacci retracement. 

What now?

Bulls tried to close the gap earlier today… and basically failed. And when a market can’t reclaim levels after a move like this, it usually means one thing: the path of least resistance stays lower. 

If bears keep control, the next logical target sits near 96.43, where the downside move would match the size of the previous November - December drop. 

Translation for metals: a weaker dollar = extra tailwind for gold and silver bulls to keep pressing higher. 

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