Cycle Trading

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The True Strength Indicator for the dollar has been forming a triangle consolidation for the past 6 months. It looks like it has approached a point where a decision needs to be made.

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A bullish break of the TSI consolidation will lock in a right translated nature to the current daily cycle (as we will see below). A rejection by the upper TSI trend line keeps open the possibility of a left translated cycle forming.

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Wednesday was day 10 for the dollar’s daily cycle. The new high on Wednesday has shifted the likelihood of this daily cycle forming as a right translated cycle. Should a swing high form here, then the possibility of a left translated cycle forming that leads to an intermediate cycle decline and possibly a yearly cycle decline would still be in play.

The EURO has also been forming a much larger, multi year consolidation.

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The EURO is in its timing band for a yearly low and a multi-year low. The EURO has ran the stops on the 200 month MA and is at the lower stem of a multi-year triangle consolidation. An intermediate dollar decline that leads to a yearly dollar decline would sync up with the EURO printing its yearly low.