Dollar index posts a double-top pattern at the highs this year

Dollar giveth, dollar taketh away. The greenback was bid early in the session and moved up to highs against almost all major currencies but as the dollar index re-tested the highs this year, sellers prevailed at the first attempt to break above and the gains earlier has been pared.

The dollar index is basically flat for the day now but I'd look for a break below 95.20 - the lows today - to confirm any further break lower in the dollar for now. Otherwise, the upside momentum remains in tact as the index continues to stay above the 95.00 level and more importantly the 100 and 200-hour moving averages.

With regards to the trade rhetoric, so far the dollar has been one of the bigger beneficiaries for that and with euro and sterling sentiment still rather weak it's not surprising to see further flows in the dollar for the time being.

There isn't much data risk on the day for the dollar with the third reading of Q1 GDP the only main thing on the agenda. But with month-end, quarter-end, and half-year-end flows in the picture expect the market to be a little volatile as the week draws to a close.

Regardless, technical levels are your best friend to define and limit risk. For now, 95.30 remains the key level for buyers to break above, and the 95.00 handle and the hourly moving averages are key levels for buyers to defend in order to sustain the upside momentum.