Cycle Trading

The dollar formed a swing low on Thursday.

The dollar printed its lowest point on Wednesday, day 32, placing it in its timing band for a DCL. Thursday’s swing low indicates a daily cycle low. However the dollar has not yet satisfied all of the requirements for a DCL.

Printing a swing low in the timing band for a daily cycle low are 2 of the requirements for a DCL. The dollar has also closed below the 10 day MA satisfying another requirement for a DCL. The dollar still needs to turn the 10 day MA lower and break below the daily cycle trend line before we can be confident that a DCL has formed. And seeing how 6 out of the previous 11 daily cycles stretched past 32 days also makes me think that the DCL has not yet formed. Therefore we should see any rally by the dollar be turned back by the 10 day MA. A close above the 10 day MA would have us label day 32 as the DCL.