DXY gained 1.69% last week to close at 89.84. That move printed an engulfing, bullish candlestick on the weekly chart. As long as DXY remains above 88.68 (the breakout level from the June 2010 high) I remain bullish.
However, a four-year cycle top is due now. The next short-term cycle high is expected during the first week of February.
A 3-wave (A-B-C) move off the 2011 low and my own price forecasting model converge on a price target of 91.00. The breakout from the nine-year bottoming formation forecasts an ultimate move to 103. Thee recent break out from a 30-year bullish wedge suggests a bullish move to 160!!!
None of us may be around long enough to see that, but it does make the target of 103 much more “digestible.”
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