On the technical front, the Dollar Index is bang in the middle of its 1.5-year consolidation range, holding near its flattening 50-week moving average. From a long-term point of view, the lengthy consolidation here is actually quite bullish given that the prior move was a rally that began in mid-2014 and that the index has been able to hold on to most of those gains.
On U.S. Dollar Index daily chart we can see a big sideways pattern since start of 2015; slow and overlapping price action with a personality of a contra-trend movement that can be completed now. We see it as a flat correction in black wave IV; a three wave structure where final wave C should be made by five waves.
The dollar index (DXY) is everyone’s friend. Being a good friend, it is expected to advance regularly as the Fed is expected to begin ‘normalizing’ monetary policy in December with a first rate hike in almost a decade.