USDCAD: Hurst Cycles - 23rd November 2022

The loonie is a joy to analyse on Sigma-L, a strong signal at the 80 day component fascinating to observe. After price peaks from the 18 month component in October, we anticipate price action to come

Tools required: Nominal Model | FLD | FLD Trading Strategy | FLD Trading Strategy (Advanced) | Principle of Nominality | Underlying Trend

Analysis Summary

USDCAD is a wonderful example to bring to Sigma-L subscribers in recent months, mainly due to the two main states of price action in financial markets that can guide us: cycling and trending modes.

In a cycling mode, more commonly assigned the colloquial ‘sideways’ price action title, larger periodic components are net neutral in their influence on price. We alluded to this a little in the last report, noting that the wonderfully stationary signal at the 80 day component will begin to be suppressed when power from the 18 month component is exerted, price action subsequently entering a trending mode.

From 27th September Report:

Indeed it is the relatively neutral influence of larger periodic components that has revealed the exemplary 80 day component signal (@ ~ 75 days) shown on the time frequency analysis below.

The cycling mode was re…