A brief update to illustrate the status of the US dollar index.
USD is generally an ‘anti-market’ to the broad seasonal party going on. Of course it was going to break down concurrent with the seasonal! Of course.
This morning, with easing inflation news (who’s surprised?) from Europe boosting global markets, it’s logical that Uncle Buck is bouncing as the Euro eases (for the same reason USD broke down, the implied lack of hawkish central bank policy). So now we’re in the midst of the currency Whack-a-Mole game. This is bouncing USD to test its breakdown from the daily chart’s SMA 200.
Bottom Line: it can easily fail here with ‘anti-USD’ markets partying on. If it takes out the SMA 200 and associated resistance, there could be interim volatility in markets. But right now, the buck is still in breakdown mode until proven otherwise.
