ΣL Cycle Summary

The metronome in USDCAD continues to mildly degrade, featuring a frequency modulation, which is likely transitory, to a faster cycle. We show below with a composite of USDCAD and USDCHF that this modulation is isolated to USDCAD only and the stronger commonality is tied to the ~ 80 day cycle. Traders may wish to opt for a long in USDCHF for the higher amplitude, given it displays the very strong 80 day cycle in almost as much clarity as USDCAD. The latest down leg was largely a sideways affair, indicating some bullish influence from a larger component may be starting to push up. The current phase is indicating we are in the troughing zone for the ~ 80 day cycle and should look to bullish price action over the coming month. Bulls will be hoping for a repeat of the up leg in September 2024, which has distinct similarities.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Sell - USDCAD 20th June 2025
Entry: 20th June 2025 @ 1.3729
Exit: 16th July 2025 @ 1.3708
Gain: 0.15%

Time Frequency Analysis

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ΣL Cycle Summary

A rare small loss in the metronome that is the ~ 80 day cycle in USDCAD, stable for many years and one of the most profitable periodic features in any financial market. The underlying trend is still down and this has weighed on the smaller wave here, forming what looks to be the first half of an overall bearish cycle and which is to be concluded toward the end of July. The time frequency spectra shows some mild frequency modulation toward a close and higher frequency. This is likely an artifact and we will see the 80 day resume stability (in terms of the frequency domain and resulting time frequency spectra) as the larger trend power dissipates.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Buy - USDCAD 6th May 2025
Entry: 6th May 2025 @ 1.37753
Exit: 20th June 2025 @ 1.37037
Gain: -0.52%

Time Frequency Analysis

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ΣL Cycle Summary

Once again the metronome that is USDCAD locks back into rhythm after a somewhat tricky short from the peaks earlier this year. The phase is now at the latest trough iteration and there is little reason to believe this cycle is not still fully influential in price action. The next peak is slated for mid June with the minimal frequency modulation one can expect from this sublime feature.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Sell - USDCAD 7th April 2025
Entry: 7th April 2025 @ 1.4249
Exit: 6th May 2025 @ 1.3822
Gain: 3.00%

Time Frequency Analysis

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ΣL Cycle Summary

The metronome in USDCAD continues to beat away, this latest iteration peaking from what looks to be a flat overall cycle so far. Interspersed within this wave is some higher frequency power resulting from news events and so forth, this does not affect the timing of the larger cycle around 80 days here. Price action has kindly retraced back up into the range following the tariff news, offering traders another bite at the cherry to short, based on the phasing evidence presented below.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Buy - USDCAD 18th February 2025
Entry: 18th February 2025 @ 1.4189
Exit: 7th April 2025 @ 1.4293
Gain: 0.73%

Time Frequency Analysis

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ΣL Cycle Summary

Price rose across all instruments in our USD composite, as anticipated, with this wave dominating the spectra below wavelengths less than ~ 120 days across the planet and in all prominent USD pairs. Whether the low in January is of larger magnitude remains to be seen. If we see higher lows at the next trough of this ~ 80 day wave, due early April, that will be indicative of further highs to come, likely courtesy of this cycle’s next up leg. A breach of the lows made in early January will be a striking indication of USD strength and would register multi year lows for some major pairs.

Within our composite of 23 USD denominated currencies the more exotic pairs gave the best yield, BRL/USD topping the list at 7.02% over the trade period.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Buy - ΣL USD Composite - 14th January 2025
Entry: 14th January 2025
Exit: 19th February, 2025

For a composite analysis, each constituent’s respective gain over the period is displayed, in descending order. The average of the constituent gain is also shown.

Constituent Gain vs USD:
BRL 7.02%
THB 6.82%
PLN 5.49%
ZAR 5.04%
CLP 5.00%
SEK 4.60%
HUF 4.42%
MXN 3.18%
GBP 3.16%
NOK 3.15%
NZD 3.15%
AUD 2.62%
ILS 2.48%
SGD 2.36%
CZK 1.84%
EUR 1.72%
UYU 1.72%
MYR 1.54%
PHP 1.39%
DKK 1.25%
CAD 1.14%
CHF 0.99%
CNY 0.69%

Composite Average Gain:
3.08%

Time Frequency Analysis

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ΣL Cycle Summary

A great example of news events (tariffs and so forth) causing a transitory increase in power at higher frequencies here in USDCAD. In this case it was a bullish increase, causing a spike up and subsequent collapse back into the phase of the main cycle of focus around 80 days. Whilst a transitory move of this magnitude is quite rare in USDCAD, it would have been an excellent shorting opportunity intraday for the keen cycle analyst, having known the phase of the ~ 80 day cycle is hard down. As the power and frequency of this wave has been so stationary, the chances of sustained modulation by a smaller (yet briefly dominant) component are low. We now approach the next trough of this excellent cycle, a dominant cyclic component for many years below wavelengths at less than 100 days.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Sell - USDCAD 6th January 2025
Entry: 6th January 2025 @ 1.43925
Exit: 18th February 2025 @ 1.41971
Gain: 1.36%

Time Frequency Analysis

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ΣL Cycle Summary

In this comprehensive time frequency analysis of the US Dollar against 23 global currencies at wavelengths < ~ 120 days we can discern a powerful periodic feature around 80 days. Featured previously on Sigma-L by way of the GBPUSD and EURUSD, this cycle was highly stationary in the sample until around August 2024. From this point a larger, bearish component has been in control, resulting in suppressed power for this wave but interestingly increased power at a higher frequency (namely ~ 35 days wavelength), see below.

We can reasonably extrapolate the timing of the component around 80 days however, given the historical stability and despite the recent loss of power. This gives an imminent trough at the current wavelength.

Currencies within this composite: BRL, AUD, CAD, CHF, CLP, CNY, CZK, DKK, EUR, GBP, HUF, ILS, MXN, MYR, NOK, NZD, PHP, PLN, SEK, SGD, THB ,UYU, ZAR.

Time Frequency Analysis

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ΣL Cycle Summary

Price blasted above previous resistance at multiple yearly highs during December, as we hinted at in the last report with the evidence of larger components pushing up and a bullish looking cycle shape. Today there is a sharp move down on macro/political news which has prompted this slightly earlier than forecast report. As we also mentioned in the last report into this highly stationary wave, one should take note of news events around peaks and troughs of prominent cycles. They are often catalysts to kick off the next leg. In this case it may well signal the price and cycle peak of this component and the longer component around 150 days wavelength. Both are due to trough mid to late February, as detailed below.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Early Buy - USDCAD 28th November 2024
Entry: 28th November 2024 @ 1.4001
Exit: 6th January 2025 @ 1.4374
Gain: 2.66%

Time Frequency Analysis

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ΣL Cycle Summary

This is one of those analysis that I really like writing about. The component here has been stationary for years now and is really one of the better periodic features you will find in any financial market. So why did the previous peak not result in a down move of any significance in this particular instance, as all previous peaks have since 2021? It is due to larger, unknown periodic component(s) pushing up, essentially.

The intuitive guess would be to place a larger low at the price trough in August/September of this year and make the fair assumption (based on the shape of this smaller wave) that the phase is hard up. We do know that the next longer component, around 150 days (shown below) did make a trough at that point but it is likely there is an even longer wave influencing price action. The culmination of this evidence lends itself to a possible explosive move upwards from the low of this ~ 80 day wave, coming imminently.

If it does come, watch the media/news for macro rationalisations of price movement as an interesting observation in this instance.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Sell - USDCAD 14th October 2024
Entry: 14th October 2024 @ 1.3795
Exit: 28th November 2024 @ 1.4006
Gain: -1.53%

Time Frequency Analysis

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ΣL Cycle Summary

This sublime periodic feature in USDCAD just rolls on and on. Stationary for years now and a stand out signal among all financial markets, the component around 80 days average wavelength has once again moved as anticipated. Indeed, amplitude has also been largely maintained for this up leg, likely due to the lack of price influence/power from larger components, resulting in the overall sideways price action we see in our sample. The current phasing now suggest a peak is due for this metronomic wave, see below for more detail.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Buy - USDCAD 4th September 2024
Entry: 4th September 2024 @ 1.35060
Exit: 14th October 2024 @ 1.37935
Gain: 2.13%

Time Frequency Analysis

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ΣL Cycle Summary

This excellent cycle, featured many times on Sigma-L, has recently lost some of it’s power to dictate price action but remains a tremendously stable signal below the 100 day mark. The last peak was exuberant, taking liquidity above the highs of November 2023 before falling back to the burgeoning trough we see detailed here. There is a larger wave to be aware of at around 150-160 days average wavelength, phased as being down at the time of writing, so the move back up here could feature a price peak that is left translated (early relative to the cycle peak).

Time Frequency Analysis

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ΣL Cycle Summary

In this extremely long term analysis, consisting of over 10000 daily data points, we can see the main cycle driving price in the US Dollar since December 1991. Running at around 1412 days, or 3.87 years, this wave has been fairly stable, only modulating slightly faster over the last 10 years or so. It is well spectrally separated with no signal of interest providing any comparable power above or below it within a significant range. Such a long term signal attracts a similarly large margin of time error according to the frequency modulation, at around 461 days. We write this report for subscribers at this particular juncture as the window of opportunity for the incoming trough begins around the start of this month. The subsequent peak is projected to occur early 2027.

Time Frequency Analysis

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ΣL Cycle Summary

This excellent signal in the Dollar Index is one to be watched closely given the influence of the reserve currency worldwide, most notably in the clear inverse relationship with EURUSD, which also (as you might expect!) features this component. Highlighted many times on the site in the past, this component is very stationary, pinpointing the majority of price peaks and troughs over the last few years. Our sample below of 13 iterations since November 2021 showcasing this regularity with only a few exceptions. The current down leg of this wave, running at around 80 days average wavelength, is almost over.

Time Frequency Analysis

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ΣL Cycle Summary

A surprisingly asinine and generally sideways down leg typified the latest move from this historically excellent signal in the Dollar Index. The lack of amplitude in the down leg suggests some power from longer component(s) pushing up, the result of which should be evident in this next leg higher as this cycle joins in synchrony. The most recent trough of this component is currently phased to have occurred (likely late June) or to occur very shortly. Breaching the October 2023 highs (a 40 week nominal wave peak) will seal the deal.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Sell - US Dollar Index 4th April 2024
Entry: 4th April 2024 @ 104.12
Exit: 1st July 2024 @ 105.51
Gain: - 1.33%

Time Frequency Analysis

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ΣL Cycle Summary

Another serene leg complete for this cycle in the Dollar Index, this time to the downside and it maintains the rather flat structure we have seen since January 2023. The next peak looks to be early July but will we see some welcome increase in amplitude within the move? Time will tell. Subscribers will note the inverse relationship to the similar wavelength component in global equity indices.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Sell - US Dollar Index 21st April 2024
Entry: 21st April, 2024 @ 106.02
Exit: 4th June, 2024 @ 104.28
Gain: 1.64%

Time Frequency Analysis

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ΣL Cycle Summary

A fairly serene move up in the Canadian crosses here with what is ostensibly the 20 week nominal wave, if one wishes to use Hurst nomenclature. There is some power coming from higher frequencies recently, shown in the time frequency plot below and evident in the time series as increased volatility within the rise from February to now. Within our composite the Australian Dollar performed well with the British Pound bringing up the rear and a lesser gain over the trade period.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Buy - ΣL CAD Composite 23rd February 2024
Entry: 23rd February, 2024
Exit: 8th May, 2024

For a composite analysis, each constituent’s respective gain over the period is displayed, in descending order. The average of the constituent gain is also shown.

Constituent Gain:
AUDCAD (2.53%)
USDCAD (2.21%)
EURCAD (1.41%)
GBPCAD (0.72%)

Composite Average Gain:
1.72%

Before and After

Signal comparison between our last report and the current time, in chart format.

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ΣL Cycle Summary

We have held off the update (due 24th April) for JPY pairs due to the unprecedented intervention by the Japanese state at the peak of the component recently. Serving only to increase amplitude and not timing of a periodic feature, macro and news events can, of course, be sudden and unexpected. Generally they will increase volatility (amplitude) and move in the direction of the underlying periodic influence, in this case it was toward a peak of this wave around 75 days. The component is now hard down, having established the peak and is maintaining the increased amplitude so far. The next trough for JPY pairs for this wave in particular is due mid-late May. Within our composite the Dollar outperformed against the Yen (6.07%) whilst the British Pound lagged, recording a gain of 3.03% over the trade period.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Buy - ΣL Japanese Yen Composite 11th March 2024
Entry: 11th March, 2024
Exit: 24th April, 2024

For a composite analysis, each constituent’s respective gain over the period is displayed, in descending order. The average of the constituent gain is also shown.

Constituent Gain:
USDJPY (6.07%)
AUDJPY (4.33%)
CADJPY (4.33%)
EURJPY (3.75%)
GBPJPY (3.03%)

Composite Average Gain:
4.30%

Before and After

Signal comparison between our last report and the current time, in chart format.

Time Frequency Analysis

Time frequency charts (learn more) below will typically show the cycle of interest against price, the bandpass output alone and the bandwidth of the component in the time frequency heatmap, framed in white. If a second chart is displayed it will usually show high-passed price with the extracted signal overlaid for visual clarity.

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Before and After

Signal comparison between our last report and the current time, in chart format.

ΣL Cycle Summary

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ΣL Cycle Summary

A crucial peak is upon us here in the Dollar Index, via the excellent wave around 180 days, which has been metronically stationary for many years, shown below. There is little more to add aside from noting that the next low of this wave is due in late June / early July this year. Clearly the dollar has wide influence on almost all other financial instruments so a weakening of the greenback will be reflected elsewhere. It should also be noted that the up leg of this wave has failed to breach the previous high of this wave (October 2023), reflecting a neutral to bearish underlying trend.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Buy - US Dollar Index 9th January 2024
Entry: 9th January 2024 @ 102.57
Exit: 4th April 2024 @ 104.53
Gain: 1.42%

Before and After

Signal comparison between our last report and the current time, in chart format.

Time Frequency Analysis

Time frequency charts (learn more) below will typically show the cycle of interest against price, the bandpass output alone and the bandwidth of the component in the time frequency heatmap, framed in white. If a second chart is displayed it will usually show high-passed price with the extracted signal overlaid for visual clarity.

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ΣL Cycle Summary

A fairly sideways down leg has typified this latest phase of the periodic component around 77 days in JPY pairs worldwide. Amongst our composite, the Canadian Dollar fell the most against the Yen, although that in itself was a negligible move in the grand scheme of things, considering the amplitude of the up leg from late December 2023 / early January 2024. The next peak looks to be late April at the current average wavelength.

Trade Update

See also: Live ΣL Portfolio & History

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Sell - ΣL Japanese Yen Composite 7th February 2024
Entry: 7th February, 2024
Exit: 11th March, 2024

For a composite analysis, each constituent’s respective gain over the period is displayed, in descending order. The average of the constituent gain is also shown.

Constituent Gain:
CADJPY (1.20%)
USDJPY (1.11%)
AUDJPY (-0.10%)
EURJPY (-0.40%)
AUDJPY (-0.72%)

Composite Average Gain:
0.22%

Before and After

Signal comparison between our last report and the current time, in chart format.

Time Frequency Analysis

Time frequency charts (learn more) below will typically show the cycle of interest against price, the bandpass output alone and the bandwidth of the component in the time frequency heatmap, framed in white. If a second chart is displayed it will usually show high-passed price with the extracted signal overlaid for visual clarity.

Read more