The dollar’s daily cycle peaked day 8, formed a swing high on day 9 and began its daily cycle decline. Left translated cycles that peak by day 8 typically result in a failed daily cycle. However the bullish reversal on Friday, followed up by a daily swing low today has prevented this daily cycle from failing and indicates a daily cycle low has been left behind.
The dollar printed its lowest point on Friday, which was day 18. The swing low and declining trend line breaks are two things that we look for to confirm a new daily cycle. Final confirmation would arrive with a break above the day 8 peak of 96.64. However, if the dollar is once again rejected by the 50 day MA then that may just extend the current daily cycle.
While stocks managed to regain their daily cycle trend line they still closed below the lower daily cycle band. Stocks may still manage to close again above the lower daily cycle band this week. But as long as stocks remain below the upper daily cycle band, they will remain in a daily down trend and our expectation is to see lower highs and lower lows be printed.