Sean Hyman
Contributing Writer
instructor@mywealth.com
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Today, I couldn’t help but notice that oil is around $59.60! The bottom was put in at around $33. So we’ve almost doubled off of the lows.
Why do I mention oil? Because oil and the euro tend to travel in the same direction (over time). This also helps to influence the dollar downward. Check out the chart below.
As goes Oil, so goes the Euro!
So in light of the U.S. dollar index breaking its uptrend line and falling below its 200 SMA…and the EUR/USD coming back up above its 200 SMA for the first time in a long time…and oil hitting “new highs”…I’d say it is a higher probability if someone is a buyer of the euro vs. a short seller of it in light of all of this.
The Dollar Takes it on the Chin once again!
If your analysis agrees with that too, then look for buy signals in whatever time frame that you trade from. We’re likely re-entering the era of a falling dollar once again. So even if you’re a short term trader, you want to keep that in the back of your mind and trade against the dollar. The best way to do this initially is through the euro (EUR/USD) since it’s where the next biggest pool of liquidity is for investors.
This is why they call it the “anti-dollar”. There’s no currency that has a higher inverse correlation to the dollar than the euro. Therefore, if you get bearish on the dollar, you’re automatically bullish on the euro.
Get ready for many currencies to start to “gang up” on the dollar but especially the “anti-dollar”..the euro.
Incidentally, if you want to partially shield yourself from the increases in rising oil/gas prices, then consider owning the euro.
Everyone knows that once we come out of the recession (and we will)...and the global economy starts hitting on all cylinders once again, that oil and gas prices will head much, much higher.
You know if oil has almost doubled while we’re still in a global recession, that it will really increase once the major countries of the world are “out of the woods” and back into “growth mode” once again.
Just the fact that oil has sustained these levels that are almost double it’s recent lows tells me that we’re on the “back side” of the recession and about to work our way out of it in the coming months.
Make your investments count by investing in things that will take advantage of the higher costs to come. That way, when everyone else is just suffering from them...you will be able to somewhat hedge your increasing costs by investment profits!
To learn more about how to invest in the euro and other currencies, check out our Currency Investing course today.
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Contributing Writer
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