DXY is making perhaps the final pull-back before a massive rally

The U.S. Dollar index (DXY) has been trading within a Channel Up since the March 2008 bottom during the U.S. Housing Crisis. This is not the first time we use this pattern to identify key macro trend shifts, in fact we revisited it a little over 2 months ago.

The incredible symmetry it's been showing, with clear correction phases (red Channels) followed by bullish phases, eventually lead to price rallies to the 1.618 Fibonacci extension.

Right now the price is past a 1W Death Cross, which has always been a bottom signal on this multi-year Channel Up, and is pulling back on perhaps the final mini drop before the new 2-year Bullish Leg begins.

This has always happened at the end of the Bear Cycles (red correction phase) with the Arc pattern showing a final pull-back before the decisive rebound the breaks above the 1W MA50 (blue trend-line). That break-out is the confirmation of the Bull Cycle start (Bullish Leg).

With the 1M RSI having already touched its 16-year Support Zone, which has provided the most optimal Buy Signals throughout this pattern, we expect the Dollar Index to start rising aggressively in the long-term, targeting the 120.000 - 128.000 Zone on its way to the 1.618 Fib ext, which has been where the previous Higher Highs (Cycle Tops) were priced.

Notice also that a solid peak indicator (Sell signal) is when the 1M RSI hits 80.00, indicating that the market is massively overbought (overheated trend).

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