Cycle Trading

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The dollar’s daily cycle peaked on Friday, day 17 by printing a bearish reversal. Monday the dollar printed a bullish reversal that formed a swing low, casting some uncertainty over the dollar’s intentions.

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The dollar did form a higher high before closing lower for the day, potentially setting the declining cycle trend line. Unless the declining trend line is breached, we can view Tuesday as day 19. A break above the declining trend line will signal a new daily cycle.

Meanwhile we are waiting on gold to cross one of two lines.

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Gold had that powerful rally on Friday the posted a 3.28% gain. Since Friday gold has stalled. Gold needs to break above Friday’s high on 1179 to form a swing low. Then a break above the declining trend line confirms a new daily cycle.

A break below 1130.40 produces a failed daily cycle, stretching out the intermediate cycle decline.

We are also waiting on Bonds to cross a line.

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Since printing its lowest point on day 30 following the huge bearish reversal, bonds have been consolidating that reversal. The weekly bond cycle peaked on week 4 and is currently on week 8. Bonds are in the timing band to decline into a yearly cycle low. Bonds are in the process of forming a left translated intermediate cycle, which is in line with our expectation for a yearly cycle decline.

Therefore we can expect to see left translated daily cycles form. The current daily cycle peaked on day 1. A break to new highs would shift the likelihood for this daily cycle to form in a right translated manner. However, a break below the previous low of 118.42 forms a failed daily cycle and confirms the intermediate cycle decline.