Sunday, August 30, 2009

US Dollar index chart analysis


Let's take a look at the chart of the US dollar index:
1) I use 2 simple moving averages in my system: 20 and 50 days
2) the last sell signal occurred in early April: the 20 day moving average crossed the 50 day movnig average to the downside: it was time to sell the dollar
3) today, the USD index is still below the 50 day moving average, so we're still in a downtrend for the US dollar
4) if stock markets go down, the US dollar might get traction again as investors will sell stocks and rush to cash (thus dollars) as a risk-averse strategy: if the 20 day moving average crosses the 50 day moving average to the upside, it will be time to go long the USD again. But so far we're still in bearish mode.

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