GLOSSARY · DIVERGENCE
DCDI
DXY Consensus Divergence Index
DEFINITION
A composite index measuring disagreement about U.S. Dollar Index (DXY) direction across three quantitative signals. Higher scores indicate greater consensus fragility — meaning market participants disagree more about where the dollar is headed.
Components & Weights
Yield Spread Divergence
US–German 10Y spread vs its 3-month average. Narrowing spread = bearish USD signal. Source: US Treasury + ECB.
Analyst Forecast Dispersion
Standard deviation of Wall Street EUR/USD targets. Wide range = high disagreement. Implied DXY derived via EUR-dominant basket approximation.
Speculative Positioning Extreme
CFTC COT net USD long as a 52-week percentile. Extreme readings (high or low) precede mean-reversion moves.
Implied DXY Formula
Implied DXY ≈ 109.9 × (1 / EUR_USD)^0.576
EUR-dominant approximation (57.6% basket weight), calibrated to spot. Not the official ICE U.S. Dollar Index data feed.
Score Interpretation
| Score Range | Signal | Interpretation |
|---|---|---|
| 0–30 | Low Divergence | Consensus aligned; trend likely to persist |
| 30–60 | Moderate Divergence | Mixed signals; watch for catalyst |
| 60–100 | High Divergence | Fragile consensus; elevated reversal risk |