Cycle Trading

PRE-SUMMARY

The Dollar remains in a daily uptrend, but a bearish reversal below 100.20 resistance shifts the odds toward the possibility of a daily cycle decline.

The Dollar continues to consolidate below the 100.20 level after breaking out of consolidation last week. From a cycle perspective, the current structure remains unclear. Because the decline into the day 17 low did not turn the 10 day moving average lower, it is not yet clear whether Wednesday was day 25 of the current cycle or day 8 of a new daily cycle. Thursday may have provided an important clue. 

The Dollar is in the process of forming a bearish reversal while testing resistance near 100.20. This indicates that buyers are beginning to encounter resistance after the recent advance. However, confirmation will be needed before a daily cycle decline can be signaled. A bearish break out of consolidation with a close below the 10 day moving average would signal the daily cycle decline and shift the odds toward Thursday being day 26 of the current cycle.  Until then, the daily uptrend remains intact. The market continues to consolidate beneath resistance while traders wait for the next directional signal.

CYCLE ALIGNMENT

Bullish