Cycle Trading: Weekend report preview

LikesMoney Independent Analyst

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.

Author

LikesMoney

Independent Analyst

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

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.