Can the dollar index reach 200?

The 1980s high was 150, talking about a 200 dollar target is much beyond the euro-dollar parity. What could be a few reasons a target beyond previous high at 150 may start assuming some probability? First: Dollar Index has made an average 15 year cycles starting 1970′s. A bottoming cycle in 2008 at least suggests multiyear strength well into 2012. Second, Oscillators have made a multiyear non confirmation of more than a decade. Non confirmations of such large time frames could validate the time cycle case. Third: The formation from the 1985 looks more like a completing corrective than a trend. This means even if we assume an ongoing counter trend, prices could reach back to previous highs at 150.

Further questions which come to mind are how can dollar rise, while commodities also strengthen? What happens to the US crisis? We don’t have answers to these questions yet. But what we can tell you is that time cycles might lead, lag and adapt to intermarket conditions. How time cycles do it remains to be seen.

Key levels to watch lie at 80. Above 80 the surprise of the decade is probable.

TICKS.GLOBAL - 01.04.10 07:41 (GMT) EURUSD. QUARTERLY. Momentum is one way to see TIME CYCLES. The current quarterly setup, retest of multi decade support at 1.34-1.35 and RSI momentum testing key supports suggest that we need more than a Greece bailout to stop EURUSD to fall till 1.2. All bounce backs remain corrective countertrend for us till 1.38 is clearly taken out.

ORPHEUS RESEARCH AT REUTERS - UNITED KINGDOM

ORPHEUS RESEARCH AT REUTERS - USA


5 Responses to “Can the dollar index reach 200?”

  1. DPM says:

    Hi Mukul,
    This looks like a new scenario which may emerge(as it is going to last good 5 yrs at least). If dollar and commodity both race towards top then I think equity and real estate will hit rock bottom around 2015. This can happen only by the virtue of military activity around the world.

    Thanks

    • Mukul PAL says:

      Dear Debisit, Thanks for the post and apologies for the late reply. First: World war cycles lie in 2020-2024 time windows. Second: It is not the first time military action has been connected with asset prices. At a recent coffee meeting with a client, he mentioned “Mukul I told you that your forecast of 60% drop in values can only happen if there is war like situation. The markets dropped 90% without a war.” So markets go on with their structure, with or without the war or military action. 2015 is a key time cycle high, as it marks the 30 year cycle high on commodities. The cycle started in 2000.

  2. DPM says:

    Hi Mukul, Could please tell me when you are expecting this to happen i.e dollar index above 81. As per one of your TIME TRIAD articles, whether we can expect a breakout after jan 2011. Thanks

  3. DPM says:

    Mukul,
    Thank you very much.

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