Recent correlation breakdown between $USOIL and $DXY

Usually, market watchers will say if the Dollar index DXY is down then commodities like Crude Oil and Gold should outperform. But recent market events have invalidated this assessment. Since 2022 we see that there is a correlation breakdown between USOIL and $DXY. These 2 indexes have been moving in tandem recently. In 2025 we saw a massive sale in the DXY and a similar downturn in the US Dollar index. With DXY below 100 and USOIL recently below 60 $, these 2 indexes are clearly indicating a US recession with low Oil demand.

IN this chart we see that the next key support levels in USOIL is 54 $. If we go below 54 $ then the next level to watch will be 35 $. That will be a recessionary scenario last seen during COVID lows. That can bring down the DXY to 90 levels. All those will indicate a deep recession which is not my base case scenario. My assessment we will see USOIL @ 55 $ and DXY @ 95 and then we will hover around those levels.

Verdict: USOIL can touch 55 $ if DXY touches 95.