Performance Cycles (Rieki) on nine major forex pairs gives a global perspective.

Rieki is performance in Japanese. We coined the term performance cycles in Mar 2009 when we published the paper on performance cycles in the Kyoto economics journal. Rieki was published in the Economic Policy Institute journal, Bulgaria in Aug 2010. Conventionally Time cycles are understood as 2 dimensional oscillators. Time is multi dimensional and 3 D time structures can be constructed. Rieki or performance cycles are like 2D time cycles pinpointing outperformance and underperformance.

In the illustration we have plotted Rieki of nine currencies against the respective currencies. We covered EUR USD, AUD USD, GBP USD, CAD USD, JPY USD, CHF USD, Yuan Rnmbi, Indian rupee and NZD USD. A rising Rieki is strengthening for the currency and falling Rieki indicates weakness.

Chinese Yuan, Indian Rupee and Canadian Dollar suggest a bottoming Rieki i.e. outperformance against Dollar. While Euro, Australian dollar, British Pound, Swiss Franc, Yen continue to suggest topping or falling Rieki i.e. potential underperformance or weakness against dollar. Despite an existing lag in Rieki XEY (Chinese Yuan) strengthened from near Rieki bottom in late Aug 2010.

Now there are some questions that come to mind. Why though Canadian Dollar (CAD) and Australian Dollar (AUD) are bundled as commodity currencies, they show polarized Rieki? Why despite a classic consolidating Triangle formation, Indian Rupee (INR) is suggesting a bottoming (strengthening) Rieki? Will Falling Rieki keep the weakness running on Yen against Dollar?

A bottoming (Indian Rupee) XEN conflicts with our correction scenario in Nifty, at least against a large correction on Nifty. The CAD, AUD polarized scenario could be because CAD has more OIL backing it while AUD is linked with mining exports. Is the view on AUD and CAD suggesting that metals should underperform Oil? The consolidated view through Forex Rieki can help understand the larger macro economic picture.

Time is the reason prices make a consolidating or accumulating patterns. Ignoring time can prove to be costly. The Rieki illustrated here are intermediate in nature and a real picture on time can only be understood by integrating various degrees of time as we mentioned in our earlier articles.

Mukul Pal, CMT, Orpheus Capitals, Global Alternative Research