Cycle Trading

Pre-Summary

The Dollar may be completing its daily cycle decline just as Gold enters its timing band for a DCL. The next signals from these two markets could provide important evidence for both cycles.

The Dollar printed its lowest point on Day 27, placing it in its timing band for a DCL. The Dollar has since formed a swing low. The 10-day MA and 200-day MA are now converging just above price. A close above the converging 10-day and 200-day MAs will signal Day 27 as the DCL. The Dollar remains in a daily downtrend. However, the bullish TSI divergence and developing swing low suggest that the Dollar may be trying to complete its daily cycle decline.

Gold presents almost the opposite setup. Gold is now on Day 28, placing it in its timing band for a DCL. Gold is also quite stretched above the 10-day MA following its recent breakout. A swing high with a close below the 10-day MA will signal the daily cycle decline. Gold remains in a daily uptrend. So while Gold is due for a daily cycle decline, that decline would initially be viewed as a normal correction within its daily uptrend.

Why the Two Charts Matter Together

The Dollar and Gold often move inversely, which makes their current cycle positions worth watching together.The Dollar may be trying to complete a DCL just as Gold enters its timing band for one. A Dollar close above the converging 10-day and 200-day MAs, particularly if accompanied by a Gold swing high and eventual close below its 10-day MA, would provide complementary evidence that the two daily cycles are beginning to turn. For now, neither signal should be anticipated. The market still needs to provide the evidence.

Current Framework

Dollar: Day 27 DCL candidate → close above converging 10-day/200-day MAs signals the DCL.

Gold: Day 28 in DCL timing band → swing high with close below 10-day MA signals daily cycle decline.

What to Watch: Whether Dollar strength begins to develop alongside a normal Gold daily cycle decline.