A long term oscillator, known as the Coppock Curve, points towards weakness in the Dollar. Figure 1 is a monthly chart of the Dollar Index (symbol: $DXY) with the Coppock Curve in the lower panel. The Coppock Curve is currently trading above the upper trading band that looks for statistically significant extreme readings over the prior 36 month period. The Coppock Curve has been popularized as a long term oscillator that has worked reasonably well at identifying bull signals in the Dow Jones Industrial Average.
Figure 1. Dollar Index/ monthly
For the past 12 months, the Dollar has been attempting a counter trend rally within a longer term down trend. See our Chart Book for details (i.e., shorter term data) on the breakdown in the Dollar. Currently, we find the Coppock Curve in an overbought position and above the upper trading band. Prior instances (since 1999) of the Coppock Curve being in a similar position are noted on the chart. It would not surprise me to see the Dollar testing its all time lows over the next 12 months.
We previously discussed the Coppock Cure and gold in this article.