US DOLLAR INDEX:
The US Dollar managed to rebound off long-term (internal) trend-line support (connecting Nov 2005 & Aug 2007 peaks) to probe the 400-day moving average for the first time in over two years. To put things in perspective, the Dollar Index has still only retraced a third of its losses since 2005, only half of the overall bear move. More importantly, the EUR/USD, which failed to maintain a recovery above the 10 & 14-day MA's, is being supported by key long-term trend-line at 1.4580 (connecting 2005 & Aug 2007 lows). Our short position met the initial target, then the remaining half was trailed down to the 10-day MA and subsequently stopped for profit. If the EUR/USD can sustain a rally above the 10 & 14-day MA's (mid 1.47's), this would mark an overdue correction vs the US dollar.
Strategy Summary:
SHORT EUR/USD at 1.4805, 1/2 OFF AT 1st TARGET AT 1.4665 (+140 pips)
1/2 STOPPED FOR PROFT AT 1.4733 (+72 pips)
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