05/11/09 Baltimore, Maryland The U.S. dollar failed an important technical test recently. Roll the videotape:
“This move has really lit a fire under the dollar bears,” says Chuck Butler. “Many institutional investors use the dollar index as their means of trading the dollar. And to see it fall through its 200-day moving average was enough proof for them that the dollar is heading south.
“The 200-day moving average, for those of you unfamiliar with this term, is a long-term moving average that helps determine the overall health of the asset, which, in this case, we’re talking about the dollar. It is, for all practical purposes, a dividing line, if you will, between as asset being healthy and one that is not.”
The dollar selloff has given a nice boost to other worldly monies. The euro popped to $1.36 over the weekend, and trades just a hair below that level this morning. Ditto the pound. It’s up as high as $1.52, just off its 2009 high. The yen is slowly growing stronger, now “down” to 97.
Addison Wiggin
Addison Wiggin is the executive publisher of Agora Financial, LLC, a fiercely independent economic forecasting and financial research firm. He’s the creator and editorial director of Agora Financial’s daily 5 Min. Forecast and editorial director of The Daily Reckoning. Wiggin is the founder of Agora Entertainment, executive producer and co-writer of I.O.U.S.A., which was nominated for the Grand Jury Prize at the 2008 Sundance Film Festival, the 2009 Critics Choice Award for Best Documentary Feature, and was also shortlisted for a 2009 Academy Award. He is the author of the companion book of the film I.O.U.S.A.and his second edition of The Demise of the Dollar… and Why it’s Even Better for Your Investments was just fully revised and updated. Wiggin is a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post as well as major network news programs. He also co-authored international bestsellers Financial Reckoning Day and Empire of Debt with Bill Bonner.
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12 May 2009 by the new science of saturation macroeconomics and fractal analysis of the quantum units that define growth and decay of asset valuation saturation curves is the exact final lower high day for gold.
Look for a small gap from the preceding New York close. An ending on the low of the trading day would be would technically ideal….
Correlative to this, expected an unexpected same day directional change for the US dollar against other basket currencies.