Cycle Trading

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The dollar closed above the 200 day MA today.

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Wednesday was day 13 for the dollar’s daily cycle. Peaking after day 12 shifts the odds towards this cycle forming in a right translated manner. A right translated daily cycle would provide final confirmation that the dollar printed an intermediate cycle low on May 8th.

But by closing above the 200 day MA, that opens the door to the possibility of May 8th also hosting the three year cycle low.

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The three year dollar cycle peaked in July. Then the dollar declined into October, which was a yearly cycle low. The intermediate low left behind in early May arrives at month 36, which is right in the timing band for the three year cycle low.

A close above the 200 day MA after emerging from a three year low indicates a new three year cycle has begun. However, caution is warranted. The dollar has been known to run stops around the 200 day MA. If the current daily cycle forms as a right translated daily cycle then the odds increase that May hosted the three year low and that dollar will be under general bullish conditions.