U.S. Dollar Weakness Has ETF Investors Looking For More Downside (UUP, FXE, UDN, GLD, SGOL, IAU)
The Euro has rallied against the U.S. Dollar in recent weeks, as we note (NYSE:UUP) – PowerShares DB U.S. Dollar Index Bullish is down nearly 5% from its June 7th high of $25.84. (NYSE:FXE) - Currency Shares Euro meanwhile is up about 5% from its June 8thlow of $118.79. Both products made significant moves yesterday, on better than average trading volume, with (NYSE:FXE) closing above its 50 day Moving Average, and (NYSE:UUP) breaching its 50 day moving average and sharply gapping down.
Institutional options flows seem to be positioning for further longer term downside in the U.S. Dollar, as we noted buyers of December 23 puts in significant size during Thursday’s session. A potential way to capitalize on additional weakness in the Dollar through an ETF would be with (NYSE:UDN) – PowerShares DB U.S. Dollar Index Bearish. Additionally, we note macro pressure and a significant downside move in Gold yesterday, with (NYSE:GLD) falling over 4% in the session and closing below its 50 day MA, and related ETFs (NYSE:IAU) and (NYSE:SGOL) following suit. In today’s S1F ETF Daily, market technician David Chojnacki, who has previously been bullish from a technical standpoint in the Gold ETFs, notes that (NYSE:GLD) “broke down last session below two important levels of support ($120.70 and $117.25) and is “no longer a buy at these levels.”
Please see the links below for charts of (UUP), (FXE), (UDN), (GLD), (SGOL), and (IAU) and contact us with any specific questions. Thank you.
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