Cycle Trading

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The dollar cycles through a 15 year super cycle.
The 15 year super cycle is embedded with 5 – three year monthly cycles.
The last 15 year super cycle peak printed in February of 2002.

Since then, the dollar has been locked in a pattern of lower three year highs
Even through the 15 year super cycle bottomed in May of 2008, the dollar has not broken out of the pattern of lower three year monthly highs.
And the weekly dollar chart looks dismal…

The dollar peaked on week 2 of the current weekly cycle.
Week 8 saw the dollar break below the intermediate cycle trend line, one of the signals of a weekly cycle in decline. That suggests 8 – 16 weeks for the dollar to drop.

Monday there was more doleful data for the dollar…
Monday saw the dollar break below the previous daily cycle low causing a failed daily cycle.

A failed daily cycle declares an intermediate (weekly) cycle in decline.
So in this case, it confirms the weekly cycle trend line break from last week.

The timing band for a daily cycle low runs from 18 – 25 days.
So the dollar could print a low any time between now and next week.

After this current daily cycle, we are likely to witness 2 more failed daily cycles in this current intermediate cycle.

Having said that, here is a possible scenario.
If the dollar breaks above 79.91 it will form a swing low.
Then with some follow through, the dollar will have a declining trend line break and confirm a new daily cycle.

The dollar has been known to turn on the monthly jobs report.

The dollar could rally into Friday, printing a 3 to 4 day rally, then turn on the jobs number and continue down into an intermediate cycle low.

Regardless if the dollar prints its daily cycle low this week or next week, I expect the dollar to print left translated failed daily cycles until the intermediate cycle low is in.

Equities did form a swing high on Monday.

Right now we do not know if this is just noise or if equities are initiating a move into a half cycle low.

I will say that a move by equities into a half cycle low would be congruent with a dollar rally out of a daily cycle low.

So to repeat, I expect the impending dollar rally to be brief, printing a left translated daily cycle.
Then, I believe that the decline of dollar resume …