Cycle Trading

Summary

• Event: Broke below day 51 low, extended decline into day 58
• Level: 200 day MA now acting as resistance
• Cycle Position: Late daily cycle, reversal attempt
• Signal: Cycle band sell signal remains active
• What to Watch: Reclaim vs rejection at 200 day MA

The dollar extended its decline early in the week, breaking below the day 51 low and closing beneath the 200 day moving average, before printing a low on day 58. Price reversed higher into Friday, easing the conditions for a potential swing low.

From a cycle perspective, the dollar is late in its daily cycle timing band, with the reversal suggesting a possible DCL is forming. However, confirmation will be needed, as a swing low and close back above the converging 10 day and 50 day moving averages are required to label day 58 as the cycle low.

Structure remains unclear, as an alternative count would place the prior low on day 39 as the DCL. A rejection at the 200 day moving average followed by continued downside would shift the odds toward this scenario, implying the current move is still within an active decline phase.

What is clear is that the dollar remains in a daily downtrend, with the close below the 200 day moving average reinforcing downside pressure and signaling a cycle band sell condition. However, the developing reversal introduces the potential for stabilization if price can reclaim key moving averages.

If the dollar can form a confirmed swing low and close back above the 10 day and 50 day moving averages, then a new daily cycle would be established. If instead price is rejected at the 200 day moving average, then the decline is likely to continue, keeping pressure on lower levels.

Cycle Alignment

Daily downtrend within broader mixed structure