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Dollar bulls are starting to show signs of exhaustion

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Dollar index starts to move below the 100-day MA for the first time since April


Similar to the EUR/USD post, the big question today is are we starting to see a turning point for the dollar? A daily break below the 100-day MA (red below) would represent the first since April and end the bullish bias in the dollar index seen over the last five months or so.
The dollar index failed to take out resistance at the highs of around 96.80 to 97.00 and since then has fallen back to tread waters around the 38.2 retracement level @ 94.30 and now the 100-day MA.
I wouldn’t call this a breaking point in the dollar just yet as there hasn’t been a significant change in fundamentals. The CPI report overnight was weak but it wasn’t a game changer definitely. However, the thing to consider is that the dollar’s momentum since mid-April has been unrelenting and positioning is something that needs to be talked about relative to where the dollar is trading now.
Don’t forget about the little thing in your back pocket that I have reiterated throughout the year. Yup, that’s the issue of the twin deficits. It was an issue markets harped upon in 2017 and it is still an issue now, but hasn’t been the focus of trading for quite some time. That could be something that may come up again in the coming months ahead of the midterms so be wary.
More to come…

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