Cycle analysis: Steel delivers bullish signal

LikesMoney Independent Analyst

Recently I have been chronicling my hunt for a yearly cycle low for steel. Wednesday steel delivered a bullish signal that the bottom is in.

Steel broke below the previous weekly cycle low en route to printing the May low, forming a failed intermediate cycle. That was week 20, placing steel in its timing band for an ICL. While steel formed a weekly swing low the following week I was reluctant to label week 20 as the ICL.

Wednesday's rally caused steel to breakout above the consolidation confirming that week 20 hosted the ICL.

Steel printed its lowest point on 6/20 following the day 15 peak. Steel formed a swing low and broke convincingly above the declining trend line to confirm the new daily cycle. Wednesday steel closed above both the upper daily cycle band and the 200 day MA. That further confirms that the intermediate cycle low has been set and signals that steel is beginning a new daily uptrend.

Author

LikesMoney

Independent Analyst

Assets (such as stocks, gold, and the dollar) have identifiable cycles.

EUR/USD makes a U-turn, focus on 1.1900

EUR/USD’s recovery picks up further pace, prompting the pair to retarget the key 1.1900 barrier amid further loss of momentum in the US Dollar on Wednesday. Moving forward, investors are expected to remain focused on upcoming labour market figures and the always relevant US CPI prints on Thursday and Friday, respectively.

GBP/USD sticks to the bullish tone near 1.3660

GBP/USD maintains its solid performance on Wednesday, hovering around the 1.3660 zone as the Greenback surrenders its post-NFP bounce. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold holds on to higher ground ahead of the next catalyst

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of modest losses in the US Dollar and despite firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.