June 30, 2008
The Dollar Is Looking Weak
Looking at the long-term picture, it looks as if the dollar could be in for a period of weakness. The Supertrend indicator on the daily chart of the GBP/USD chart has just turned green, which is very bullish. It's been red, and therefore in a bearish trend since March 19, but has finally turned positive. This is good news for the pound and bad news for the dollar.
It's a similar story on the other major pairs. The daily Supertrend is very close to changing over on both the EUR/USD and USD/JPY pairs. The EUR/USD looks like it could be due another upwards surge if it can break through the current Supertrend, and similarly the USD/JPY looks like it's about to fall if it can break downwards through the Supertrend.
Of course there are no guarantees but based on probabilities, if the EUR/USD and USD/JPY can follow the GBP/USD's lead and break through the current Supertrend, which they are extremely close to doing, then statistically there's a good chance that the dollar could weaken significantly across all three pairs.
This doesn't really matter if you're a short-term trader like myself, but for long-term traders it may be worth paying attention to.