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Line in the Sand for the US Dollar Index Has Been Crossed


The DX is trading just above 79.25, and now is the time to reconsider those US Dollar Index long positions.

Editor's Note: The following was posted in real time on our premium Buzz & Banter (click for a free trial).

As I mentioned earlier this week, a move below 80 in the US Dollar Index will set up a great risk-reward buying opportunity. (See Markets: US Dollar Index at Critical Support Level.)
We are getting that move today, as the DX is trading just above 79.25, and I think now is the time to "back up the truck!" here on US Dollar Index long positions with a tight stop.

I would use a close below the 79 level as a stop on DX long positions, but be careful because as you can see, late last October the stops got run pretty hard on a fakeout move below 76. However, this might be the one "fat pitch" we get this year to buy a pullback in the US dollar uptrend. See the weekly chart below with strong 200-week moving average support right here. Risking a quarter with $10 of upside is a trade I will take any day!

Click to enlarge

Good luck out there…these certainly are interesting markets!
Positions in DX futures, EUO
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