The dollar’s daily cycle peaked on day 6. With Wednesday being day 15 the dollar has assured us of a left translated cycle. Our expectation was for the dollar to break below the previous daily cycle low, producing a failed daily cycle.
Today the dollar delivered a bullish surprise.
It appeared yesterday that the loss of the 10 MA signaled a final decline into a daily cycle low. Instead today’s clear and convincing declining trend line break confirms a new daily cycle.
The dollar is currently on week 19 of its intermediate cycle. Allowing 4 – 6 weeks for this daily cycle to conclude will take the dollar to the later stages of its timing band for an intermediate low. So we would expect to see this new cycle form as a left translated cycle.
Perhaps that is part of the reason that precious metals managed to rally despite the dollar strength.
If you were to tell me that the dollar would break with expectations and instead of forming a failed daily cycle deliver a 1.19% gain on the day as it launched into a new daily cycle, I would have expected for gold to tank. Instead, gold held up extremely well, perhaps sniffing out the impending intermediate dollar decline.
Gold printed its lowest point on Tuesday. It formed a swing low yesterday and delivered more bullish follow through today. Gold would need to rally past day 12 to assure us that this daily cycle will form as a right translated cycle.
So we will need to watch the 50 day MA and the 200 day MA. If gold is rejected by either one of these important moving averages, it would signal that gold will continue into its final intermediate cycle low. If gold is able to regain both of these moving averages, then that would signal that gold has begun a new intermediate cycle.