Cycle Trading

The current dollar rally out of the September 17 th intermediate cycle low has been pathetic.

It has taken the dollar 6 weeks to finally breach the declining cycle trend line.
Still after 6 weeks, the dollar has yet to form a swing low.
It is also interesting to note that the dollar has been unable to close above the 80 level on a weekly basis.

This is not typical behavior for the dollar as it rallies out of an intermediate cycle low.

The dollar typically surges out of an intermediate cycle low
Let’s look as some examples of typical dollar rallies from IC lows:

The dollar rally out of the 2011 IC low saw the dollar form a weekly swing low on week one and then on to gain three points in four weeks.

The next sample shows two intermediate cycle lows. This was during the first leg down back in 2010 as the dollar was declining into a three year low.

The first IC low shows a swing low in week 1 followed by a 3.47 gain in three weeks.
The second sample again shows a swing low in week 1 followed by a 5.81 point gain in 4 weeks.

Even as the dollar was declining into a three year low both of these rallies managed to surge out of their respective IC lows.
So here is here where we are:

What does this mean?

The current three year cycle sits at month 17 and the yearly cycle sits at month 8, with the intermediate cycle at week 6 and could last up to another 3 months.

This current intermediate cycle should see the dollar decline into its yearly cycle low in about 3 months – say January – ish

If I am right about this, the dollar will likely take out the previous yearly cycle low of 78.09 in the process.
By breaking below 78.09, that would deliver a failed yearly cycle and confirm a decline into the three year low.