US Dollar Coiling

The US Dollar index has moved higher since early 2018, but really for the past year now it has traded in a very tight sideways range. Below is a chart showing the rolling spread between the Dollar index’s highest and lowest close over the last 12 months (rolling high/low spread) going back to 1972. As shown, the current 12-month high/low spread is only the fifth time it has dropped down to 5% or lower over the last 45+ years. While the spread could certainly go lower, in the past it has usually not stayed at this low of a level for long. We’d expect the Dollar to break out of its sideways range in one direction or the other sometime soon.

(Click on image to enlarge)

Below is a price chart of the US Dollar index over the last ten years. The only other time that the rolling 12-month high/low spread dipped below 5% over this 10-year time frame was back in July 2014, and following that tight sideways trading period, the Dollar eventually broke out to the upside in a big way.  

(Click on image to enlarge)

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