{"id":2289,"date":"2010-08-09T01:56:03","date_gmt":"2010-08-09T05:56:03","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=2289"},"modified":"2010-08-09T01:56:03","modified_gmt":"2010-08-09T05:56:03","slug":"the-dollar-breaks-down","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2010\/08\/09\/the-dollar-breaks-down\/","title":{"rendered":"The U.S. Dollar Breaks Down"},"content":{"rendered":"<p>The recent descent in the U.S. dollar continues nearly unabated. Even as I pointed out <a href=\"http:\/\/drduru.com\/onetwentytwo\/2010\/08\/03\/critical-juncture-for-usd\/\">the importance of the 200-day moving average (DMA) for the U.S. dollar<\/a>, deep, deep down inside I felt the U.S. dollar would finally put up a fight at this key support level. The trends that have brought us to this point have been far too consistent and seemingly due for some kind of substantial reversal. Moreover, <a href=\"http:\/\/drduru.com\/onetwentytwo\/2010\/08\/04\/british-pound-over-stretched\/\">the British pound seems extremely over-extended against the U.S. dollar<\/a>, and <a href=\"http:\/\/drduru.com\/onetwentytwo\/2010\/08\/04\/25-years-of-decline-for-usd-vs-jpy\/\">the yen is trading at historic strength against the dollar<\/a>. Yet, on Friday, the U.S. dollar broke down anyway (click for larger view).<\/p>\n<p><center><br \/>\n<figure id=\"attachment_2290\" aria-describedby=\"caption-attachment-2290\" style=\"width: 290px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2010\/08\/100806_EOD-DollarIndex.jpg\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2010\/08\/100806_EOD-DollarIndex-300x136.jpg\" alt=\"The U.S. dollar breaks down below its 200DMA\" title=\"The U.S. dollar breaks down below its 200DMA\" width=\"300\" height=\"136\" class=\"size-medium wp-image-2290\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2010\/08\/100806_EOD-DollarIndex-300x136.jpg 300w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2010\/08\/100806_EOD-DollarIndex.jpg 687w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><figcaption id=\"caption-attachment-2290\" class=\"wp-caption-text\">The U.S. dollar breaks down below its 200DMA (click for larger view)<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>Once this move shows some follow-through, it will be time to abandon all bets on reversals and\/or relief rallies and get back with the momentum of an ever-weaker dollar (I remain bullish as ever on the Australian dollar, and I am STILL waiting for a fresh entry point for the gold ETF, GLD). The Federal Reserve policy announcement on Tuesday should push the &#8220;final&#8221; conclusion.<\/p>\n<p>In the meantime, it seems to me a bit odd that Treasury bills continue to rally (in price) while the dollar gets weaker. The dollar is not serving as a similar &#8220;safe haven.&#8221; Either this is a growing bet that the U.S. will be relatively alone amongst developed economies in slowing down in the coming months and\/or a &#8220;normalization&#8221; against the euro as fears of sovereign defaults disappear nearly as fast as they flared (meaning this is a great time to put those bets back in play).<\/p>\n<p>Be careful out there!<\/p>\n<p>Full disclosure: long USD\/JPY, long TBT, short EUR\/USD, long FXA<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The recent descent in the U.S. dollar continues nearly unabated. Even as I pointed out the importance of the 200-day moving average (DMA) for the U.S. dollar, deep, deep down inside I felt the U.S. dollar would finally put up a fight at this key support level. The trends that have brought us to this &#8230; <a title=\"The U.S. Dollar Breaks Down\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2010\/08\/09\/the-dollar-breaks-down\/\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[20,62,21],"tags":[128,138,1597,1591],"class_list":["post-2289","post","type-post","status-publish","format-standard","hentry","category-forex","category-technical-analysis","category-u-s-dollar","tag-british-pound","tag-japanese-yen","tag-technical-analysis","tag-u-s-dollar"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The U.S. Dollar Breaks Down - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2010\/08\/09\/the-dollar-breaks-down\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The U.S. Dollar Breaks Down - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"The recent descent in the U.S. dollar continues nearly unabated. 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