Cycle Trading: Text Book Set Up
|The dollar formed a bearish reversal on Wednesday that failed to close above the 50 day MA. That is a text book set up for a decline into a daily cycle low.
The dollar delivered bearish follow through on Thursday and formed a swing high. A peak on day 9 can still result in a left translated failed daily cycle.
The dollar is also in a text book set up for a daily downtrend. A daily downtrend is characterized by peaks forming below the upper daily cycle band and lows printing below the lower daily cycle band. Wednesday's bearish reversal not only closed below the 50 day MA, it also closed below the upper daily cycle band to maintain the daily downtrend. A break below the previous daily cycle low of 99.19 will form a 2nd consecutive failed daily cycle as the dollar seeks out its yearly cycle low.
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