Tuesday, June 9, 2009

Has the USD reached a temporary bottom ?


I do not think the USD has completed its bear cycle yet. I think in a longer term, the USD still has some more room to go further down. But at this time, I think it MAY has reached a temporary bottom.

From the USD index chart, we can see a no-nosence big body white candlestick closing above the lower Bollinger Band 2 days ago. The MACD has already crossed up and so is the Stochastic. The Stochastic is behaving a little bit more bullish as it has also crossed up its own 20's signal line which would offer its first initial buy signal. The MACD is not as attractive since it is still below its own zero signal line wich usually make its positive crossover NOT as strong for a buy signal. Meanwhile the D- has been falling and we may see the D+ crosses up above it which would offer another buy signal. and yesterday closing also managed to go above the 20 SMA (which is the middle BBand here), and by that I would take it as another buy signal.

The falling ADX which is above both the D- and D+ is confirming the prior bear trend may be over. If price manages to close above the upper Bollinger Band and that would be a very strong buy signal.

Since thre is nothing postive in the weekly chart (price still below the lower BBand, MACD and Stochastic still negative) so I do NOT think this is a market terminal point, maybe you should trade it for the short term.

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