Sunday, August 10, 2008

8/10 - BUY USD (SELL EUR/USD)


US DOLLAR INDEX: Races through 200-day resistance


The US Dollar Index has surged through the 200-day moving average to probe key trend-line resistance. Early morning Friday saw the USD/CHF break through its 200-day MA and the Euro and Pound lose key support, underpinning the USD's first time above the 200-day MA in 20 months. Most of the US Dollar Index's success is attributed to the Euro's demise. A loss of key support confirmed a major distribution pattern, namely a double top, providing a price objective near 1.46. Moreover, the EUR/JPY lost key 50-day support and is now threating its 100-day MA. While the EUR/USD is now in capitulation mode, caution is advised as daily studies are registering extreme oversold readings.


Strategy Summary: LOOK TO BUY USD (SELL EUR/USD)

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