In early May, we noted that the US dollar index had entered an important short-term cycle that could have a meaningful impact on long-term direction. Since then, the dollar has moved sharply higher, approaching previous highs of the rally from August 2011.
During the last four months, the overbought correction from January has developed into a bullish consolidation formation that favors a resumption of the intermediate-term uptrend.
With respect to cycle analysis, the magnitude and duration of the alpha phase rally from late April has confirmed a transition to right translation.
Price behavior during the next few weeks will likely provide a significant signal with respect to long-term direction, so it will be important to continue monitoring the dollar closely. We will identify the key developments as they occur in our daily market forecasts and signal notifications available to subscribers. Try our service for free.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.