Dollar Index: Hurst Cycles - 5th December 2022

A fascinating picture emerges in the Dollar Index which suggests strong evidence for variance to Hurst's nominal model at the 54/18 month nominal component. We explore it in this report

Tools required: Nominal Model | FLD | FLD Trading Strategy | FLD Trading Strategy (Advanced) | Principle of Nominality | Underlying Trend

Analysis Summary

The advantage of using a time frequency analysis over more subjective pattern analysis methods has come into it’s own with this report into the Dollar Index. We have been tracking the rise from 2021 and subsequent recent collapse with interest, the 20 week component a clear signal in the uptrend and now itself approaching a trough.

However, what has really stood out about this analysis is the absolutely compelling components present at the longer degrees, more specifically the 18 month and 54 month ‘nominal’ components. It appears, with good, stationary evidence in the frequency domain, that there is a clear 2:1 harmonic ratio between the component at around 19 months (nominal 18 month component) and the component at 40 months (nominal 54 month component). This is a clear outlier from Hurst’s original nominal model, espoused to have a …