Dollar index hangs on at the 200-hour moving average
And that is a vital defense so far, as a break below the 200-hour MA (blue line) would see near-term sentiment turn bearish for the dollar index. As buyers come in to defend the level, we're seeing EUR/USD and GBP/USD retrace some gains on the day falling to 1.1640 and 1.3288 respectively now.
The last two times the dollar index fell below both the 100 and 200-hour MAs, it managed to find support from a retracement level highlighted here. And before that, the index only ever fell below both the key near-term levels one other time and that was during May.
This time around there's a different feeling about the move with serious questions now being asked of further upside extension in the euro and sterling against the dollar. The moves today so far suggests a mere squeeze of dollar longs, but a break below the 200-hour MA @ 94.486 will help to lend sellers with more incentive to drive the greenback lower after failing to hold a break above the October high @ 95.150 again:
Once again, it's still too early to call an end to the dollar's upside run since mid-April but several attempts at a failed break to the upside may see some exhaustion in the topside momentum. And that will be something to consider in the next few sessions as well.
