The U.S. Dollar Index has trended steadily lower for the last 10 months. But there are growing signs it has bottomed.
First, DXY managed to break back above its 50-day simple moving average in late February. It then made a higher high (versus earlier in the month), unlike its lower high in late November.
Next, it tried to sell off after the Fed’s uber dovish meeting last week, but quickly moved higher. Next, the bounce occurred around the highs of March 2 and February 5. That suggests resistance has become support.
Third, the 21-day exponential moving average (EMA) has crossed above the 100-day simple moving average (SMA). The 50-day SMA is about to follow suit. This reverses a pattern in place since the slide began in June.
This strength in DXY could be a warning sign for equities for two reasons. First, it comes despite the Fed’s dovish policy. Second, global-growth assets like the Australian dollar and copper have shown signs of hitting a wall lately. This bounce in the greenback could morph into a flight to safety.
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First, DXY managed to break back above its 50-day simple moving average in late February. It then made a higher high (versus earlier in the month), unlike its lower high in late November.
Next, it tried to sell off after the Fed’s uber dovish meeting last week, but quickly moved higher. Next, the bounce occurred around the highs of March 2 and February 5. That suggests resistance has become support.
Third, the 21-day exponential moving average (EMA) has crossed above the 100-day simple moving average (SMA). The 50-day SMA is about to follow suit. This reverses a pattern in place since the slide began in June.
This strength in DXY could be a warning sign for equities for two reasons. First, it comes despite the Fed’s dovish policy. Second, global-growth assets like the Australian dollar and copper have shown signs of hitting a wall lately. This bounce in the greenback could morph into a flight to safety.
TradeStation is a pioneer in the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.[/i
