A Bad Sign for the Dollar?

The US Dollar index managed to close above its 50-day moving average every day of 2010 up until yesterday.  As shown below, the currency has been in a very nice uptrend for quite awhile, but that uptrend is now in serious jeopardy.  Yesterday the dollar initially traded well below its 50-day and then fought back but couldn't quite close above it.  Today it briefly traded above the 50-day -- which is now acting as resistance instead of support -- but it failed to hold by the end of the day.  While a few basis points above or below a 50-day moving average may not seem like a big deal, its importance to technical traders should not be overlooked.

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Comments

[Ben Le]

The longer term picture for the Greenback is still looking quite bearish. However, the intermediate term uptrend is still looking quite bullish. Only trading below $78-$80 would end the uptrend. I believe the dollar will rally hard for the next several years if it can trade above $82 in the next few weeks.

[Jeff]

It is not surprising to see dollar trending downwards.

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