U.S. DOLLAR INDEX We haven't seen the cyclical bottom yet

Following the stimulus news this week, there is a lot of talk around the USD and whether it will rise or fall as a result of the rescue package. I decided that it may be the perfect time to look at the (much) larger picture to see where we stand. This is a simple study on the DXY (U.S. Dollar Index) on the 1M time-frame, representing its Cycles in the span of decades.

As you see it is the perfect example of Sine Waves. There are very clear Cycle Tops and Bottoms since the 1960s. The Tops appear to be on average 190 months (almost 16 years), while the Bottoms 175 on avg so far, but based on the since waves they may follow a +20 bar sequence. As a result, while the next top for the DXY (which I have to add at this point that the sequence is Lower Highs) may be around 2032/33, the next Bottom (based on the waves) should be around 2025. That means that we are still a long way of seeing the cyclical bottom and the best course of action is to sell every rally.

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