The dollar’s daily cycle has peaked on day 25. The lowest point following the day 25 peaked printed on day 27.
This is beginning to look just like the previous daily cycle. There was a day 19 peak followed by a low printing on day 20. The ensuing daily cycle then failed to print a higher high before printing a failed, left translated daily cycle low on day 17.
Since printing the day 27 low on the previous Friday the dollar has been consolidating the recent rally. A break above the day 25 peak of 81.78 confirms a new daily cycle. A break below the day 27 low of 81.32 extends the daily cycle decline. The dollar may have revealed its intention on Friday with the bearish breach of the developing trend line. Which has implications for gold, which we will discuss in the Weekend Report.
Setting aside the daily cycle counts and backing out our view we can see that the dollar appears to be repeating the pattern of the rally out of the May pivot. Our expectation has not changed. We expect a back test of the triangle consolidation and then the dollar will continue to rally.
Stocks closed above the declining trend line on Friday to confirm a new daily cycle.
Stocks have rallied approximately 2.6% off the day 39 low and regained the 10 day MA. Stocks were not able to close above the 50 day MA and we may see stocks crawl along the 50 MA allowing for the 10 MA to catch up before making another run higher.
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