USD slid back to its uptrend line

Just two days after my post that USD's uptrend would continue (here), USD was hit by sharp correction that sent it back to its uptrend line. See chart below.


Chart: USD's daily chart as at April 24, 2009 (Source: Stockcharts)

Naked Capitalism has pointed out that China has been secretly stocking up on gold (here) in a move to get away from the USD. China has been very vocal about a drop in the value of USD as her holdings of US Treasuries and Agencies rose from about $275 billion to $1250 billion from end-2003 till today. Meanwhile her holdings of gold has increased from 600 tons to 1054 tons during the same period (here). This piece of news will augur well for gold & won't be good for USD. Let's see whether USD index can rebound from its medium-term uptrend line support at 84.5 level next week.