Cycle Trading

PRE-SUMMARY

The dollar signaled a weekly cycle band buy signal last week after reclaiming 2 key weekly moving averages. However, weakening price action is now placing focus back on the 10 week MA.

The dollar formed a weekly swing low and closed back above both the 50 week moving average and the 10 week moving average last week. From a cycle perspective, with the dollar currently in a weekly uptrend, reclaiming both weekly moving averages indicated a continuation of the weekly uptrend and signaled a weekly cycle band buy signal.  However, the dollar is not delivering bullish follow through to start the week. Instead, the dollar is breaking lower and beginning to turn the 10 week moving average lower again.

What is clear is that the 10 week moving average is now becoming a key level to watch for the intermediate cycle structure. While the dollar attempted to reassert weekly strength last week, the peak on week 9 still leaves open the possibility of a left translated weekly cycle formation.  At 16 weeks, the current intermediate cycle is entering mature timing territory. Confirmation will still be needed before signaling the intermediate cycle decline.  If the dollar closes back below the 10 week moving average, then it would signal the intermediate cycle decline and strengthen the odds that the week 9 peak marked a left translated weekly cycle formatio

Cycle Alignment:

• Mixed