Two Dollar Scenarios

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The dollar’s daily cycle peaked on day 7 when it was rejected by the 50 day MA. Since then it has been in decline.

1 $$$ daily

Today saw the dollar print a bearish engulfing candle that once again was rejected by the 50 day MA. The dollar should now decline into its daily cycle low. With a timing band for a daily cycle low that normally begins at day 18 the dollar should trend lower for at least the next 5 days.

If the dollar breaks below the previous daily cycle low of 79.39 then it will form a failed daily cycle. A failed daily cycle signals that the intermediate cycle is in decline. An intermediate decline is consistent with the scenario of the dollar descending into its three year cycle low. But there is another scenario that we need to keep an open mind about.

2 bounce

The other scenario is that October may have hosted the three year cycle. The multi-month consolidation is consistent with consolidations that normally occur when the dollar leaves behind a three year low, which I have detailed in the Weekend Report.

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