Dollar Index - 5 September 2024
You will come across specific terms in these notes (FLD, VTL, and so on). Rather than explain them each time, you will find definitions here: guidance notes for Hurst cycles terminology.
Dollar Index (DXY) - the last 20 day cycle in the longer 40 week cycle is rolling over.
We still believe that the Dollar is transitioning lower into a 40 week cycle trough (which we more conservatively labelled 20 week cycle magnitude in the last note). This is a long cycle and has a lot of pulling power, which is why the recent decline has been so precipitous and why the intermediate cycle peaks on the way down are so left translated.
The view therefore also remains that the most recent trough marked the last 40 day cycle in the 40 week cycle series and we think that this is rolling over now. A penetration down of the 20 day FLD circa 101 confirms the most recent high as the 20 day cycle peak. This also projects down towards 100, with the longer cycles as a tailwind. A likely target time zone for the 40 week cycle trough is the last week of September, but be aware that long cycles after big declines often trough more forward in time.
