Cycle Trading

Pre-Summary

The Dollar formed a swing low and closed above the 10-day MA on Wednesday, signaling Day 17 as an early Daily Cycle Low. The new daily cycle is developing, but the Dollar remains in a daily downtrend.

The Dollar became stretched below the 10-day MA early in August before finding support and consolidating below the 100 resistance level. The Dollar printed its lowest point on Day 17, which was early for a Daily Cycle Low. Rather than labeling the low in advance, we waited for the market to provide the evidence. That evidence arrived on

Wednesday.

The Dollar formed a swing low and closed above the 10-day MA, signaling Day 17 as an early DCL. The Dollar remained contained by the 100 resistance level on Thursday. As it rallies out of its DCL, we will be watching for the 10-day MA to turn higher. The Dollar remains in a daily downtrend. It will remain in its daily downtrend unless it closes above the upper daily cycle band. The new daily cycle therefore does not change the trend by itself. It signals that the Dollar has begun a new daily cycle within its existing daily downtrend.

Current Framework

Trend: Daily downtrend.

Cycle: Day 17 signaled as an early DCL.

Next Trigger: Turn the 10-day MA higher as the Dollar rallies out of its DCL; a close above the upper daily cycle band is required to begin a daily uptrend.