Cycle Trading

It is getting late in the dollar’s daily cycle.
Tuesday was day 29 for the daily dollar cycle.

The dollar tagged a significant congestion zone at the 80 level and ended the day higher.
Now the dollar can still go lower.
It is just with each passing day, the odds of printing a daily cycle low increases.
Should the dollar follow through higher on Wednesday and break above 80.47, it will form a daily swing low.
With the daily cycle being so late in the timing band, a swing low will quite likely mark the daily cycle low.

Once a swing low forms, a break above the declining cycle trend line will confirm a new daily cycle.

Recall in the Weekend Report we discussed the yearly dollar cycle?

We noted that the yearly cycle is in decline. Therefore the dollar will need to be contained by the declining (red) yearly cycle trend line to continue into a yearly cycle low.

Let’s look at this on the daily chart.

The yearly cycle peaked in July and is still in decline.
The daily dollar cycle may have printed its daily cycle low today at day 29,

So if the dollar is still caught in the grips of a yearly cycle decline, the new daily cycle will rally enough to break above the (black) daily declining trend line but reverse by the (red) declining yearly cycle trend line.

This scenario should enfold over the next 4 – 8 trading days.

A daily dollar cycle rolling over after 4 – 8 days would certainly add to our holiday cheer …