The dollar fulfilled its cyclical duty today by breaking out to a new daily cycle high.
Yesterday the dollar formed a swing low and delivered a clear and convincing trend line break to confirm a new daily cycle. Following a right translated cycle our expectation is to see the dollar go on to print a new daily cycle high. Today the dollar fulfilled that expectation.
With the dollar being late in the intermediate cycle we now turn our attention to signs that the dollar will form a left translated cycle that will lead to an intermediate cycle decline.
The new high today pushes the weekly cycle out to week 32. That makes this intermediate cycle stretched beyond the normal duration and therefore we can expect to see the new daily cycle form as a left translated, failed daily cycle. The dollar has only printed one other weekly cycle that stretched to 32 weeks, which makes this an outlier event.
Another possible explanation is that week 23 is acting as an intermediate cycle low and that this is really week 9. There was no failed daily cycle leading into the week 23 low. There have been occurrences of weekly cycles not failing, which makes this scenario a possibility. What strengthens this case for a week 23 low is that it falls into the normal timing band for an intermediate cycle low.
The two compelling things about a week 23 intermediate low is that, one, it makes this the second intermediate cycle of the year for the dollar. Many yearly cycles are comprised of two intermediate cycles, with the second intermediate cycle failing into the yearly cycle low. A failed weekly cycle typically peaks or or near week 8.
The second compelling thing about a week 23 intermediate low is how this now aligns with when the dollar has previously been at this level.
The last three times that the dollar was turned back by this level resulted in either a severe yearly cycle decline or a three year cycle decline. So if this is week 9 of the second intermediate cycle of the year, that would leave up to 10 to 16 weeks for the dollar to decline into the intermediate and yearly cycle low.
Perhaps that is why despite the dollar being at an 8 year high the Miners are diverging off their recent lows.
The Miners appear to have left behind its yearly cycle low in early November.
And despite the dollar breaking out to a new higher today, the Miners also closed higher for the day.
The daily Miner cycle peaked on day 14 and appears to have printed its daily cycle low on Tuesday, day 28. Tuesday printed as a higher low. Wednesday saw the Miners form a swing low and today they delivered a clear and convincing trend line break to signal a new daily cycle. A close above the declining 50 day MA would confirm a new daily cycle.