⬤ The US Dollar Index just wrapped up a rough week, sliding to its lowest point of the year. Looking at the chart, there's no sign of the selling pressure letting up—the dollar keeps trending lower instead of bouncing back. This isn't just a temporary dip; the dollar has failed to recover previous support zones, signaling genuine weakness rather than a quick shakeout.
⬤ The weekly price action confirms that the drop toward a three-year cycle low isn't finished yet. The chart shows a clear cyclical pattern with the dollar continuing its descent within the expected timeframe. Recent candles point to persistent downward momentum, backing the idea that this corrective phase still has room to run.
⬤ According to technical analysis, the three-year cycle bottom could arrive during February's second week. But there's a catch—one critical step remains before we can call this decline complete. The Dollar Index needs to break below September's low, and while it's getting close to that level, it hasn't punched through yet. Until that happens, the cycle low remains unconfirmed.
⬤ Why does this matter? The US dollar drives everything from commodity prices to foreign exchange rates across global markets. Continued dollar weakness ripples through equities, currencies, and raw materials. As DXY approaches this potential cycle low window, traders are watching one thing: will it finally crack below September's level and complete this cyclical decline?
