While prices have moved above the 50 day EMA and the shorter EMAs are moving higher, I am skeptical of the dollar making a big move up at this point. GDP reprinted at the 1.8% level -- which is pretty weak -- and there is little reason the Fed will raise rates anytime soon. I would only be a buyer if prices moved above the longer term moving average. If prices move below the EMAs, I'd wait for a rebound into the EMAs before shorting.Let's take a look at the chart:
Prices hit resistance and started to move lower. Also note the EMA picture: all are moving lower, the 10 and 20 are below the 50 and the 10 is about to move below the 20. Prices are also below the EMAs.
This week, we learned that the macro picture for the US economy is weakening as well -- the ISM number dropped, Case Shiller moved lower and initial claims are still above 400,000. There is little reason to see the Fed raising rates anytime soon, meaning the interest rate play won't exist for the dollar. In addition, the weakening economy means the dollar will lose its attractiveness as an investment.
I'd wait for a price rebound into an EMA, and then short.
