The Dollar Index’s 90-month moving average appears poised to cross its 200-month moving average for just the fifth time since 1980.
While the upcoming intersection of these trend lines would typically indicate a buying opportunity for technical traders, previous crossovers for the index have preceded trend reversals rather than bullish moves.
Though the greenback may have broken a cyclical uptrend in December 2016, the collision of the moving averages could be enough to trigger bets that the currency will extend its reversal and continue to fall, barring any structural changes in the U.S. trade deficit.
Source: Bloomberg Pro Terminal
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