Cycle Trading

Summary

• Breakdown below 10 day MA confirms downside pressure
• Bearish follow-through building after swing high
• Daily cycle decline now in progress
• 200 day MA emerging as potential support

Gold formed a swing high on Monday and delivered bearish follow-through on Tuesday, closing below the 10 day moving average. This shifts the structure into a developing daily cycle decline.

From a cycle perspective, the break below the 10 day moving average signals the daily cycle decline, with price now expected to work lower as the cycle progresses. The prior peak also suggests a right-translated daily cycle formation, which typically results in a more controlled decline.

The focus now turns to structure and timing, as gold works through its cycle decline phase. The 10 day moving average should begin to turn lower as price continues to move through this portion of the cycle.

Gold is currently in a daily downtrend, with downside pressure confirmed by the break below the 10 day moving average. However, the location of the eventual cycle low remains the key variable, with support likely to be tested as the cycle matures.

If gold continues lower, then the rising 200 day moving average will be an area to watch for a potential daily cycle low to form. If price accelerates and closes below the lower daily cycle band, then it would indicate a continuation of the daily downtrend and signal a cycle band sell condition.

Cycle Alignment

Daily downtrend within broader mixed structure