The U.S. Dollar index (DXY) has been trading within a Channel Up since the March 2008 bottom during the U.S. Housing Crisis. We have used this chart many times in the past to refer to major macro shifts on the market and it has never failed to deliver. Last time we called for a final pull-back before a massive rally would be confirmed once the market breaks above its 1W MA50 (blue trend-line).
Well that break-out happened, the price broke above its 1W MA50 for the first time in exactly 1 year (March 2025) and a 1M closing above it would be the final confirmation of the upcoming 2-year Bullish Leg on this Channel Up.
As you can see, the symmetry among the Cycles of this multi-year pattern is extremely high, almost equally weighted corrections, symmetrical Lower Highs Bearish Legs (red Channels) and equally impressive bullish phases (Legs), that eventually lead to price rallies to the 1.618 Fibonacci extension where the market topped.
All conditions for the new Bull Cycle (Bullish Leg) have been fulfilled. Along with the price being at the bottom of the Channel Up, with the -13.35% decline being a benchmark correction historically, we are also past a 1W Death Cross, which has always been a bottom signal on this multi-year Channel Up.
With the 1M RSI having already touched its 16-year Support Zone, which has provided the most optimal Buy Signals throughout this pattern and now just crossing above its MA (yellow trend-line), we expect the Dollar Index to start rising aggressively on the long-term, targeting the 120.000 - 128.000 Zone on its way to the 1.618 Fib ext, which as mentioned is where the previous Higher Highs (Cycle Tops) got priced. 125.000 is a fair Target within a 2-year time-frame.
Notice also that a solid peak indicator (Sell signal) is when the 1M RSI hits 80.00, indicating that the market is massively overbought (overheated trend).
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Well that break-out happened, the price broke above its 1W MA50 for the first time in exactly 1 year (March 2025) and a 1M closing above it would be the final confirmation of the upcoming 2-year Bullish Leg on this Channel Up.
As you can see, the symmetry among the Cycles of this multi-year pattern is extremely high, almost equally weighted corrections, symmetrical Lower Highs Bearish Legs (red Channels) and equally impressive bullish phases (Legs), that eventually lead to price rallies to the 1.618 Fibonacci extension where the market topped.
All conditions for the new Bull Cycle (Bullish Leg) have been fulfilled. Along with the price being at the bottom of the Channel Up, with the -13.35% decline being a benchmark correction historically, we are also past a 1W Death Cross, which has always been a bottom signal on this multi-year Channel Up.
With the 1M RSI having already touched its 16-year Support Zone, which has provided the most optimal Buy Signals throughout this pattern and now just crossing above its MA (yellow trend-line), we expect the Dollar Index to start rising aggressively on the long-term, targeting the 120.000 - 128.000 Zone on its way to the 1.618 Fib ext, which as mentioned is where the previous Higher Highs (Cycle Tops) got priced. 125.000 is a fair Target within a 2-year time-frame.
Notice also that a solid peak indicator (Sell signal) is when the 1M RSI hits 80.00, indicating that the market is massively overbought (overheated trend).
---
** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! This is best way to keep it relevant, support us, keep the content here free and allow the idea to reach as many people as possible. **
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.