Cycle Trading

The dollar  ran into resistance at the 104 level and had been consolidating above the 200 day MA — until Wednesday.

The dollar broke bearishly out of consolidation on Wednesday, closing below both the 10 day MA and the 200 day MA. The dollar then delivered bearish follow through on Thursday by closing below the previous daily cycle low.  Closing below the previous DCL forms a failed a daily cycle and extend the intermediate cycle decline. 

However, as I was proof reading my post, I realized that I overlooked the bullish divergence developing on the oscillators — which point to a different cycle count.

The bullish divergence on the oscillators indicate that day 26 was not the DCL ,which could make Thursday day 37 of a stretched daily cycle. So it is wise to be open to both possibilities. Regardless of the cycle count what is clear is that the dollar is currently in a daily downtrend. The dollar will remain in its daily downtrend unless it closes back above the upper daily cycle band.