Does the USD Off-ramp Exist Right Now?

The US dollar continues to make new 20y highs. The combination of a hiking Fed, European energy crisis and China property issues/covid zero has continued to put upward pressure on the US dollar. The question now, with the Bloomberg Dollar Index up 12% year to date, can the dollar keep going?

DXY highest levels since 2002

To me, the answer is it can, and the catalyst is that typically the dollar acts as a very pro-cyclical force. I.e. its direction is self-reinforced. A big framework for me, and something I have gone over in prior posts is my dollar doom loop framework. The “doom loop” USD framework has been a big part of my FX process for a long time. It has been in my recent notes and I also did a Bloomberg Odd Lots podcast on this subject in the middle of July.