The dollar broke below the previous daily cycle low on Tuesday. This formed a failed daily cycle and continues the dollar’s intermediate cycle decline.
Tuesday was day 7 for the dollar’s daily cycle. At 7 days, the dollar is not expected to print a daily cycle low for at least another 2 weeks. But since 2 of the previous 3 daily cycles stretched to 36 plus days, the dollar could trend lower for up to 4 plus more weeks.
The normal expectation if the dollar breaks below a previous low would be to see gold soaring, but so far that has not happened …
Gold printed its lowest point last week on day 41, placing gold deep in its timing band to print a DCL. A swing low has formed and it appears that Tuesday was day 5 for the new daily cycle. The troubling thing is that despite the dollar dropping, gold has struggled to rally out of the day 41 low and has yet to break above the declining trend line to confirm that it is in a new daily cycle.
I think that gravitational pull from gold’s impending intermediate cycle decline is, in part, restraining this rally out of the day 41 low.
Gold printed its lowest point last week, which was week 21. That does place gold in the early part if its timing band for an intermediate cycle low. Since the previous 2 weekly cycles ran 26 and 28 weeks respectively, the weekly gold cycle could easily accommodate one more daily cycle before printing its intermediate cycle low. And since gold has yet to print a failed daily cycle, our expectation is to see this new daily cycle form as a left translated cycle and fail so gold can complete its intermediate cycle decline.
I have to say that the dollar forming a failed daily cycle on day 7 with 2 to 4 weeks before expecting a daily cycle low seems to be at odds with the expectation that the current daily gold cycle forms as a left translated cycle to complete gold’s intermediate cycle decline. My guess is that either the daily cycle count for the dollar is incorrect or gold did print an intermediate low on week 21.
Gold has formed a weekly swing low. If gold breaks above the declining weekly trend line then we will be forced to label week 21 as the ICL. But the other possibility is that the daily cycle count for the dollar may be incorrect.
I believe that the dollar regaining the 200 MA and closing back above the lower daily cycle band after printing the day 28 low does signal that day 28 hosted the DCL. But we do need to acknowledge that 5 of the previous 7 dollar daily cycles stretched 30 days or more so Tuesday being day 34 would align with that scenario. So if the dollar prints a DCL over the next few days that be the trigger for gold to complete is intermediate cycle decline.