Potential Dollar Curveball

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The dollar’s daily cycle peaked on day 10. It declined until last Wednesday, day 18, when the downtrend was broken. The trend line break in the timing band for a daily cycle low had us label day 18 as a right translated daily cycle low.

Well the dollar may have thrown us a curve ball.

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Following the day 18 low the dollar printed a swing low on day 1. Then it formed a swing high on day 2. The dollar then declined until this morning when it broke below the day 18 low. On a day where the previous daily low was lost, I would expect to see the dollar close lower. Instead, the dollar printed a bullish reversal. This break from our expectation means that we need to be open to the possibility that day 18 was not the daily cycle low. If the dollar breaks above 80.82 it forms a swing low and delivers a trend line break. Should that occur then will it will extend the daily cycle low out to today. Then that would make today day 23.

Regardless if today was day 5 or day 23 our weekly picture stays the same.

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The dollar printed its yearly low in June. Even before that yearly low the dollar has not been able to sustain an intermediate rally past 4 weeks. The intermediate cycle has peaked on week 2 and now is in week 5. A break below 80.46 forms a weekly swing low and signals the intermediate cycle decline.

Despite the bullish reversal in the dollar, the Miners managed a positive close.

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The daily Miner cycle has been in decline since late October. This decline broke below the June low, therefore extending out the yearly low. Monday, day 29, was the lowest point since the late October peak. The Miners are late in their timing band for a daily cycle low. A break above 22.41 forms a swing low. Then a break above the declining trend line confirms a new daily cycle.

Meanwhile, NATGAS has recently confirmed a new intermediate cycle.

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On day 13 NATGAS broke above the declining intermediate trend line to confirm a new intermediate cycle. With a new intermediate cycle confirmed, patience is necessary to await the decline into the daily cycle low. A swing low in the timing band for a low will provide a good entry point.

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