Deciphering the Dollar

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The dollar is still doing a masterful job hiding its intentions.

The dollar first peaked on day 17. The swing high breached the accelerated (dashed) blue trend line making it look like, in real time, that the dollar just began its daily cycle decline. But there was no bearish follow through. The TSI was still trending lower and that also prevented us from labeling day 18 as a daily cycle low.

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While that could still be the correct scenario, I think that Friday marked the peak to the daily cycle. We may have just witnessed a 1 day decline. A break above Friday’s high of 88.37 will have us label today as a 23 day, right translated daily cycle low.

And if today was the daily cycle low, I suspect that we would see the dollar peak quickly and then roll over into an intermediate cycle decline.

The Miners have been acting bullishly.

GDX

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Last Wednesday we discussed here how the Miners were in a Danger Zone. But on Friday the Miners broke out of that danger zone by delivering a big 6.02% gain. That saw the Mines break above the declining trend line to confirm a new daily cycle. Today the Miners back tested the declining trend line and then delivered more bullish follow throughout.

If the Miners are emerging out of an intermediate cycle low then this daily cycle should form in a right translated manner. Which means we should see this rally extend past day 12. We can see three hurdles for them, the declining 50 day MA, the previous swing high of 22.16 and the 200 day MA.

Regaining the declining 50 day MA would certainly be a bullish development. WE could see the Miners crawl along the 50 MA for a few days before breaking through. Then,if the Miners go on to break above the previous high of 22.16 they will break the pattern of lower highs. If the Miners do rally up to the 200 MA, that would likely cap this daily cycle.

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One thought on “Deciphering the Dollar

  1. Pingback: Clear & Convincing | Cycle Trading

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