The tug of war between buyers and sellers this week continue
This is pretty much a copy and paste of yesterday's post here. There hasn't been any notable dollar direction in general this week, to sum it all up. Price action in the dollar index continues to trade around the 100-day MA (red line) with buyers continuing to defend any real move lower.
But any upside movement in the dollar is also capped:
The 100-hour MA (red line) has been a key level this week for sellers to lean on and they continue to maintain the near-term bearish bias in the dollar index as price holds below the two key hourly moving averages.
However, there hasn't been any firm conviction to hold a substantial break below the 100-day MA either. That leaves price action playing ping pong between these two key levels still for the time being.
If there's anything, it appears that markets are awaiting for a catalyst to drive the next move. This is a pivotal time for the dollar. If buyers are unable to keep price above the 100-day MA, this represents the first key break in the upside momentum that we have seen since April.
And if sellers fail to to break below, this could lend conviction for dollar bulls to drive price back up again as long positions are narrowed out in this period i.e. less overstretched position in dollar longs.
Right now, dollar trades are hinging on the key technical levels here. We'll get a break on one side or the other eventually, and that will be the next big trade in the dollar. In the meantime, keep an eye on Treasury yields too. Any further rise could help to provide some tailwind for the greenback this week.
