The Rambus chart which Fully recently posted made me take another look at the dollar chart. I have to admit, my 80 (ish) target for the end of May clearly hasn’t happened. Price is behaving differently to the last two downturns after the dollar cycle peaks. Does this mean we haven’t peaked yet ? On the log chart, price has bounced off the long term downtrend line. On the non log chart it’s bounced off a zone of horizontal support. Dollar volatility appears to be subsiding, allowing the amplitude of each wave to decrease. There are two big reasons why I think the dollar top (for this cycle) is behind us. First, the moving averages have crossed over decisively, second time appears to have run out. You could, perhaps argue that we may have another 6-12 months before the dollar cycle peaks, but I don’t think so. Cycles experts will have a view on this based on the way cycles can be left or right translated.

The red and green lines at the bottom and top of the above chart, are of equal length, so the green zone indicating a dollar top, could, perhaps be pushed to the right, but moving average crossover argues against this. However, as long as we remain above the red downtrend line, it’s not possible to turn completely bearish on the dollar. Here’s another way of looking at it…

And finally, I took a look at the Rambus fractal…

My bearish view on the dollar is (for now) still in place. I expect the next wave down to breach that support line and, in doing so, make it clear that the dollar cycle is still working and we have several years of downside ahead of us. This needs to happen in the next 6 months, otherwise the scenario will be very different. Always keeping an open mind.