Cycle Trading: Weekend report preview

LikesMoney Independent Analyst

The Dollar

The dollar formed a swing low on Friday.

The dollar broke below the day 32 low on Thursday to extend its daily cycle decline. Thursday was day 34, placing the deep in its timing band for a DCL. The dollar formed a swing low on Friday that closed above the 50 day MA, 10 day MA and the declining trend line to confirm the new daily cycle. The dollar is currently in a daily downtrend. But a close above the upper daily cycle band will end the daily downtrend and begin a daily uptrend.

Stocks

Stocks closed below the daily cycle trend line on Friday.

Stocks are showing signs of a change of character. Stocks have been in a strong uptrend that has been characterized by RSI 05 forming quick bullish reversals once oversold and then embedding in overbought. Tuesday’s bullish reversal followed by Wednesday’s bullish follow through did not even see RSI 05 reach overbought. Stocks were rejected by the declining trend line on Thursday then closed below the daily cycle trend line on Friday to signal the daily cycle decline. Any bearish follow through will send stocks to seek out their DCL. And with a peak on day 11, any bearish follow through will left translate this daily cycle to also lead to an intermediate cycle decline.

While stocks did close below the daily cycle trend line, they did not close below the 50 day MA. This is the last area for defense. If the Fed decides to intervene, a swing low here would have us label day 19 as a half cycle low. Stocks are still in a daily uptrend. If a swing low forms above the lower daily cycle band then stocks will remain in their daily uptrend and trigger a cycle band buy signal.

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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.