Cycle Trading

The dollar closed lower on Monday.

Monday was day 4 for the dollar’s daily cycle. After an extended daily cycle decline, it is not unreasonable for the dollar to back test the 10 day MA before the daily cycle starts to gain some traction.

And once the dollar’s daily cycle begins to gain some traction that will cause the dollar to form a weekly swing low.

The dollar printed its lowest point last week, following the week 4 peak. At 18 weeks, that places the dollar in its timing band for an intermediate cycle low. So if last Tuesday, June 6th, did host the DCL then the rally into a new daily cycle will likely see the dollar go on to form a weekly swing low. A break above 97.47 forms a weekly swing low to signal a new intermediate cycle.

And if the dollar begins a new intermediate cycle, that should send gold into its intermediate cycle decline. But before gold rolls over into an intermediate cycle low there is the potential for this daily cycle to form as a right translated daily cycle.

Monday was day 23 for the daily gold cycle. That does place gold in its timing band for a daily cycle low. The 2 obvious areas that could trigger a daily cycle low would from support at the 50 day MA or the 20 day MA.

Gold is in its 2nd intermediate cycle of the year. If the dollar is rallying out of its yearly cycle low that will potentially send gold into its yearly cycle decline. Gold has already formed a weekly swing high following the bearish reversal on week 4. A close below the 50 week MA will signal the intermediate decline for gold.