The Dollar

The dollar printed a bullish candle on Friday.

The dollar printed its lowest point on Friday, day 36, placing the dollar deep in its timing and for a daily cycle low.  Friday’s bullish candle eases the parameters for forming a swing low.  A break above 93.51 forms a swing low.  Then a close above the 10 day MA will signal the new daily cycle.  Then the dollar should rally enough to break above the declining trend line.  The dollar is in a daily downtrend.  It will remain in in its daily downtrend unless it closes above the upper daily cycle band. 

Stocks

Stocks formed a swing high and closed below the 10 day on day 28 to signal the daily cycle decline.  However, stocks found support at the 3200 level.

Support at the 3200 level prevented stocks from completing their daily cycle decline.  Since the 10 day MA did not turn lower we did not label day 28 as the DCL.  Which makes Friday day 33, placing stocks in their timing band for a daily cycle low.   The last cycle ran short at 21 days, so stocks could see an extended daily cycle - which will allow for the cycle counts to balance out.  

The Fed has been flooding the market with an unprecedented amount of liquidity and this may be obscuring the equity cycle.  We may need to rely on our cycle band tool, which tells us that stocks are in a daily uptrend.  Since Friday’s swing low formed above the upper daily cycle band that indicates that stocks remain in their daily uptrend and triggers a cycle band buy signal.  One could use the trailing 10 day MA as a stop.

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.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis


Latest Forex Analysis

Editors’ Picks

AUD/USD weaker ahead of RBA’s monetary policy decision

The Aussie is weak, despite receding dollar’s demand and the robust performance of US indexes. Coronavirus developments hit the commodity-linked currency ahead of the RBA.

AUD/USD News

Gold: This just might be as good as it gets for gold

The price of gold is trading at $1,975 within a range of between $1,960.54 and $1,986.76 at the time of writing, virtually flat on the day in consolidation having eeked out a fresh all-time high.

Gold News

USD/JPY struggling to retain the 106.00 level

The USD/JPY pair traded as high as 106.46 on Monday but struggles to retain gains above the 106.00 level amid lack of dollar’s demand.

USD/JPY News

Ethereum on its way to regaining $400 while BNB hit a new high at $22.5

BTC/USD is more stable than other coins right now but has been able to recover from its crash towards $10,500. It is currently trading at $11,369 and faces very little resistance until $14,000.

Read more

WTI drops below $40 on demand worries, OPEC+ output increase

Crude oil prices posted losses last week and seem to be struggling to shake off the bearish pressure on Monday. As of writing, the barrel of West Texas Intermediate (WTI) was trading at $39.85, losing 1.5% on a daily basis.

Oil News

Forex Majors

Cryptocurrencies

Signatures