Usman Salis
⬤ The US Dollar Index is catching attention again as historical patterns point to strength during midterm years. The index typically rallies in these political cycles, and recent macro headlines—including renewed global dollar demand—back up that story. The chart shows DXY respecting a long-term rising channel that's been holding for over a decade.
⬤ Price action shows repeated bounces near the lower boundary of the channel during past cycle lows in 2010, 2014, 2018, and 2022. Each time led to fresh upside momentum. Right now, the index is stabilizing near trend support instead of breaking down. This looks a lot like previous Dollar Index rebounds that came after long consolidations.
⬤ The cyclical story gets support from macro developments too. Reports of international players re-engaging with the dollar system are adding to expectations of steady demand. Historically, a stronger dollar has meant tighter liquidity and pressure on risk assets. Analysts see similarities to earlier DXY macro cycle moves that followed extended sideways phases before expanding higher.
⬤ If this pattern plays out, the impact goes beyond just currency strength. Dollar trends shape commodities, global liquidity, and how different assets move together. The fact that this multi-year channel keeps holding suggests we're looking at another continuation cycle—not a structural breakdown.
Usman Salis
