The dollar was up by about 1.15 earlier today in reaction to the ECB. It looked as if the dollar had printed its daily cycle low. Then the dollar tanked.
Today’s bearish reversal by the dollar continues the daily cycle decline making Thursday, day 19 for the dollar’s daily cycle. And by closing below the lower daily cycle band, this signals that the dollar is also continuing its intermediate cycle decline.
Gold rallied strongly in reaction to the dollar dropping.
Gold has been so bullish since it emerged from its yearly cycle low in December that it had obscured our daily cycle counts. Part of the reason why is by not delivering clear and convincing trend line breaks to confirm the daily cycle declines. Gold appears to have completed a backtest of the declining trend line today, similar to the January DCL. A break above 1274.20 will form a swing low to begin a new daily cycle.
The dollar is getting late in its timing band to print an intermediate cycle low. It is likely that the dollar will do so at the conclusion of the current daily cycle. That should send gold higher, into its intermediate cycle peak. We need to be prepared for this new daily cycle for gold to form as a left translated cycle and fail, leading to the intermediate cycle decline as the dollar rallies out of its intermediate cycle low.