Cycle Trading

Summary

• Dollar breaks lower cycle band
• Day 51 deep in timing band
• 50 day providing initial support
• 98.53 key downside level
• Watch for DCL confirmation

The dollar gapped lower on Wednesday, pushing price into day 51 and placing it deep within its timing band for a daily cycle low. While price did find support at the 50 day moving average and produced a reversal attempt, the broader structure weakened. From a cycle perspective, the close below the lower daily cycle band is significant, as it ends the prior daily uptrend and signals that both the daily and intermediate cycle declines are underway. This shift in structure places downside pressure on the market unless key levels can be reclaimed.

The dollar is now attempting to stabilize after an extended move lower, but remains under pressure following the breakdown. However, the dollar is stretched below the 10 day moving average and has begun to consolidate along the 200 day, which may allow the 10 day to catch up. If the dollar can break above 99.16, then a swing low would form. A close above the 10 day moving average would then be needed to confirm day 51 as the daily cycle low. If that confirmation occurs, then the dollar could resume its broader uptrend. If not, a break below 98.53 would extend the daily cycle decline and reinforce the shift in trend

Cycle Alignment

Bearish — breakdown below lower band