Cycle Trading: Text Book Set Up

ANALYSIS | 02/17/2017 05:05:58 GMT

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.

Share: Analysis feed

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.