A Bad Sign for the Dollar?

Includes: DBV, UDN, UUP
by: Bespoke Investment Group

The US Dollar index managed to close above its 50-day moving average every day of 2010 up until Monday. As shown below, the currency has been in a very nice uptrend for quite awhile, but that uptrend is now in serious jeopardy.

On Monday the dollar initially traded well below its 50-day and then fought back but couldn't quite close above it. Tuesday it briefly traded above the 50-day -- which is now acting as resistance instead of support -- but it failed to hold by the end of the day.

While a few basis points above or below a 50-day moving average may not seem like a big deal, its importance to technical traders should not be overlooked.

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