Cycle Trading

The dollar was soundly rejected by the 200 day MA on Thursday.

Thursday was day 10 for the dollar’s daily cycle. Not only was the dollar rejected by the 200 day MA, but the dollar also formed a daily swing high and loss the 50 day MA. These are all very bearish developments for the dollar that signal a continuation of the dollar’s intermediate cycle decline.

We discussed on Wednesday the if the dollar did form a swing high and lose the 50 day MA, that it would still be possible for a failed daily cycle to form — which would be bullish for gold. So let’s take a look at gold.

Thursday’s bullish reversal has eased the the parameters for gold to form a daily swing low. And at 30 days, gold is deep in its timing band to print a daily cycle low. A break above 1318.60 forms a daily swing low and signals a new daily cycle. Something to watch for is to see if gold can close back above the upper daily cycle band. If gold closes back above the upper daily cycle band that would indicate that an intermediate low has been set.