Cycle Trading: Gold Lynch Pin

Gold has entered a new bull market.  But the lynchpin to determining gold's short term direction rests with the dollar.

The dollar printed its lowest point on week 24, following the week 20 peak.  Week 24 does place the dollar in its timing band to print an intermediate cycle low.  The dollar is currently testing the declining weekly trend line.  A clear and convincing break above the declining weekly trend line will confirm that week 24 hosted the intermediate cycle low.  Whether or not the dollar breaks above the declining weekly trend line will be determined by the translation of the dollar's daily cycle.

Day 9 remains as the daily cycle peak, which favors a left translated cycle formation. The dollar needs to break convincingly below the daily cycle trend line to confirm the daily cycle decline. The dollar still is in a daily downtrend. Therefore once the dollar breaks convincingly below the daily cycle trend line that should lead to the dollar breaking below the previous daily cycle low of 99.19 to form another failed daily cycle, which should send gold higher.

However, if the dollar regains the 50 day MA and breaks to new highs, then that will change the translation of the daily cycle to a right translated formation and signal that week 24 hosted the intermediate cycle low. And if the dollar breaks to new highs, that should send gold into its daily cycle decline.

The new high on day 19 assures us of a right translated daily cycle formation and signals that gold has entered its timing band for a daily cycle decline. A swing high will likely send gold into its daily cycle decline. But, if the dollar continues its daily cycle decline that should provide the fuel to allow gold to break above the 200 day MA.

But if week 24 did host the dollar's intermediate cycle low, then gold's 200 day MA will likely act as resistance and send gold into its daily cycle decline.  But a week 24 intermediate low  for the dollar could still be bullish for gold.  The dollar still needs to complete its yearly cycle decline.  Therefor it is likely that the dollar's next daily would form as a left translated, failed daily cycle.  A left translated failed dollar daily cycle would help to fuel gold to rally into its intermediate cycle peak.