Cycle Trading

We have been watching the dollar trying to ascertain if a new intermediate cycle has begun. This morning we will look to the EURO for clues to the dollar’s intention. Beginning with the weekly chart.

The EURO printed a multi-year low in July, 2012. The yearly low printed in April and was back-tested in July. Currently the EURO is on week 16 of its intermediate cycle.

This week the EURO is in the process of printing a bearish reversal and has formed a weekly swing high. These are signals that the intermediate cycle has topped and is ready for an intermediate cycle decline.

So now we will switch to the daily chart.

The current daily cycle has peaked on day 7 and sits at day 12. A peak on day 7 has a good chance of forming as a left translated cycle. A break below 1.34723 delivers a failed daily cycle and confirms an intermediate cycle decline.

A confirmation of an intermediate cycle decline for the EURO should correspond with the dollar confirming its intermediate cycle ascent.