My thoughts on the USD have been pretty consistent, and judging by the title, you should know that I'm bullish.
I shall break this post down into section to further clarify my thought process;
World's reserve currency;
The fact that the US is the world's reserve currency has tremendous benefits, far beyond what people give the notion, credit for. To be the world's superpower has built in credit, and allows one to bend the rules when it comes to debt ratios as a percentage of GDP and to create/pass along inflation to the rest of the world. No reserve currency lasts forever as the chart below will show, but we are no where near the end of our reign in my opinion.
The threat of the USD's reserve status being replaced is simply non existent at this time. To answer that threat, we simply need to look at history, and every time the world's reserve currency has been replaced, it has been due to that's country's super power status being reneged/challenged. The US is in a very unique situation, geographically it is almost impossible to invade, and militarily, it is arguably a generation ahead of its nearest competitor(s). All in all, the military might of the US is unquestionably superior to any other country, and as long we maintain that, the chances of the USD being the world's reserve currency shall remain unchallenged in a serious way, except for a few rogue nations trying to make a statement by accepting the Euro, Yen, or Yuan in its place, its tiny in comparison. Lets not forget that despite our recessions, we are still the worlds largest economy with the biggest middle class. A middle class that has problems, and is eroding, but still the healthiest in the world.
For the chartists, cyclist and any other methodologies, sophistication isn't always a good thing, and at times the simplest charts speak the loudest.
A chart of the USD for the past 3 years (yes, I'm being selective since that's a time frame that helps one invest for the foreseeable future, and not a 100 year chart) is very simply put, bullish or neutral if you want to be cute. The case of a bearish look is simply non existent. The chart is from the lower left to the upper right, higher lows and higher highs (Greens and blues keep creeping higher). Will that continue for ever? probably not, but we can simply see that the trend is pointing higher. A dip/drop may be due, but the USD is far from being in a bearish trend.
History and QE(s);
Many point to the horrible job that the Federal Reserve has done since its inception and how the USD has lost the majority of the it's strength (losing some 90+%) in 100 years, to which I have no argument against, we all agree. Sadly my time horizon isn't that long, and it has not been a straight line down either, in spurts, it has risen and that is all that we are concerned with, a month or a year out is all that an investor/trader should be concerned with. Why buy gold at 1800 if one could wait and but it at 1400? Knowing the strength of the USD, helps one buy assets on the cheap during deflationary bouts and sell them during inflationary times, regardless of the USD's 100 year trajectory. Its simply not the end of the USD's legacy, we simply aren't being replaced by another superpower yet.
The next issue in this same section is QE, and how the argument is made for the USD to lose its value by printing. The truth is that we were printing (and I sue that term loosely) 85 billion a month and cutting back 10 billion at a time currently (so far). Even though that sounds like a lot of money one must realize that as a percentage of global assets under management for instance (80+ Trillion), that's a drop in the bucket, and that its more of a psychological boost to assets than a monetary one. The devaluing of the USD via QE is more of a dramatized theory than fact, and has been blown out of proportion, by inflationary fear mongers.
As we know, timing is everything in investing, and all world reserve currencies get replaced in due time, but to constantly expect the USD to get replaced is not a viable investment strategy. I am sure that there were a ton of analysts in 1971 predicting the demise of the USD as we went off the gold standard (the end of the Bretton Woods accord) and became a purely fiat system, yet as right as they may be one day, they have been wrong for 40+ years, since the king of all currencies, is still the USD, today.
Can the dollar drop here? Absolutely and this could very well be a temporary peak, but to expect the lows from 3 years ago to fail in the coming few months is very far fetched in my opinion. Doom and gloom calls on the USD are simply unrealistic.