Photographer: Dimas Ardian/Bloomberg
According to the longer-term view, the dollar is likely to continue to rise. This projection is based upon the breakout that that is depicted in the monthly graph below. The breaking of the down trending line in 2015 line reversed a 25-year dollar downtrend. When this occurs, there usually is a period of consolidation.
The recent breakout over 100 is denoted by the second arrow. Now we see how significant the breaking of that 100 level was. It marked the end of the consolidation that followed the 2015 breakout. The 110 level is the next target. The 120 area is a longer term objective, likely by yearend.
I have lived outside of the USA since 1990. When global investors perceive a difficult future, they move assets to the USA. The country is perceived as the safest place for assets. In addition, the dollar is perceived to be the ‘least worst’ of the currencies. Based upon the developments of 2022 such as war, inflation, and potential recession, this shift in funds is understandable.
The second graph is that of the current dollar cycle composite. It has been rising since the autumn of 2021 and does not peak until the end of this year. It confirms the constructive breakout in the monthly graph and supports the move to 120.
Oil Monthly from 1880
Here is the long-term picture of the dollar.
Oil Monthly Cycle
This accurate monthly cycle tops at the end of the year.
Source: https://www.forbes.com/sites/greatspeculations/2022/07/19/the-dollar-uptrend-is-likely-to-continue/