Trading is, as you know, an inexact science. So while we *think* it’s likely that the dollar has put in a major bottom, a cross above its 200-day moving average would significantly reinforce this hypothesis.
The dollar tests it’s 200 day MA. (Source: WSJ.com)
We’re not there yet, but we’re getting close. A push above 79.5 would indicate that you should, at the least, not be short the dollar.
Being long an asset that’s trading above it’s 200 day MA, and short one that’s trading below, is usually advisable. And ironically, this rule is so simple and reliable that many traders usually ignore it – myself included!
Our Partners
We publish a free daily newsletter, The Contrary Investing Report, which highlights trading and investing stories that are key to your financial success and survival. Please subscribe here.
Post Footer automatically generated by Add Post Footer Plugin for wordpress.
More on this topic
(What's this?)
US Dollar Approaches 200-Day Moving Average
(Blogging the Commodity Bull Market, 12/22/09)
Crash Alert: The Future and Failure of the U.S. Dollar
(Contrarian Profits, 11/16/09)
USD trend change: When will it start dragging down the market?
(Erik's market view, 12/16/09)
