Abstract：Last week, an analysis was reported by some renowned news media, pointing out the “death cross” in the daily chart of the U.S. Dollar Index (DXY). Such cross occurs when the 50-day moving average crosses below the 200-day moving average. It also predicted that DXY is possible to slump.
Last week, an analysis was reported by some renowned news media, pointing out the “death cross” in the daily chart of the U.S. Dollar Index (DXY). Such cross occurs when the 50-day moving average crosses below the 200-day moving average. It also predicted that DXY is possible to slump.
Such bearish technical formation which reflects future market trend, from my point of view, is not worthy of worry. The reason lies in the results of the same situation last time. On December 30, 2019, the “death cross” occurred. In an ironic twist, however, DXY rebound dramatically to 99.91 after it reached its bottom at 96.35.
February 21 witnessed a golden cross when the 50-day moving average rose above the 200-day moving average. Ironically, DXY plunged to 95.00 after it peaked at 99.91.
Such golden cross and death cross occurred are both wildly inaccurate. The theory as a joke may be accurate once the viewpoints are exchanged.
In the session of technical analysis, I‘ve shared my opinions on the crossovers and held that the 50/200 crossover is not the best-performing moving average (keep you guessing). Thus, I won’t adopt the death cross to estimate how DXY performs in the future market.
DXY came under downside pressure in the short run because of the bullish trend in U.S. stock markets rather than the rationales proposed by Roach, nor the death cross occurred. In addition, such divergence between DXY and U.S. stock markets will be dominant over the short term, with its references among the three U.S. stock indices lie on the DJIA and the S&P 500 rather than the Nasdaq composite index. Thus, it is necessary to analyze the continuing effect of the two indices on DXY in the short term. But in the long run, the main factors affecting DXY will remain to be traditional basic ones such as politics, economics and monetary policies.
[About The Author]
Since 1987, Jasper Lo has been engaged in the financial industry (forex, futures and gold) for more than 32 years and holds forex R.O., securities and futures broker licenses. Mr Lo is an expert in trading forex, precious metals and commodity futures and an basic and technical analyst.
Over the years, Mr Lo won many individual and team sales champion awards, as well as outstanding employee awards. He was invited, as a guest mentor, to the University of Hong Kong, Guangdong Ocean University and Guangzhou Jinan University. And he was also appointed as the chief training consultant by Hantang Securities and Dongguan Securities in China.
Mr Los experience as guest of honor invited by media including Chinese and English newspapers and columnist:
-Guest of honor invited by TVB New Channels such as Finance Channel, Forex Focus, Global Watch
-Guest of honor invited by Now Finance Channel - Forex Reports
-Guest of honor invited by i-CABLE Finance Info Channel - Forex Opportunities
-Guest of honor invited by ViuTV - Investor Smarter Group
-Columnist of Finance and Forex Market of Ming Pao
-Presenter of Finance and Forex Forecast of Ming Pao
-Presenter of Investment 36 Stratagem and Technical Analysis in 1 Min of Ming Bao Finance
-Appointed lecturer of Ming Pao Investment Seminar and Paid Course
-Author of the best seller Investment 36 Stratagem
-Columnist of Forex Expert, Forex Analyst, Marathon Weekly of ET Net
-Guest of honor of Open Good Morning of ET Net
-Guest of honor of Metro Finance Channel - Market Opening, Instant Market Fighting, Guangdong-Hong Kong Finance, Finances Power, Market Analysis
-Guest of honor of New Era of Investment of RTHK
-Columnist of Capital Commodities of Capital Weekly
-Guest Presenter of Wang Guanyi Online Finance Channel - Fund and Commercial Bond
-Columnist of Wealthub Finance and Investment Smart Platform of Enrich Culture
-Guest presenter of Weekly Investment in the World of Enrich Culture
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