Bullish correction on horizon for US dollar in near term

The Dollar Index (DXY) has been stuck on a declining trend since the start of the year, falling from a high of 103.80 to the current low of 91.62, a drop of 11 per cent over the past eight months. The DXY is an index of the United States dollar relative to a basket of foreign currencies, mainly against the Euro, Japanese yen, pound sterling and Canadian dollar.

From a cyclical point of view, the DXY follows a long-term cycle of 98 months where a cyclical top takes over in between every 98 months, turning the DXY into a prolonged d…