Dollar Index Technical Analysis – 10 14 June – USD

• Our previous update had the US dollar index trading around the 61.8% Fibonacci retrace of the last major swing higher at 82.60.
• We noted that “this area had acted as support for three consecutive trading sessions and any failure to hold above 82.60 on the closing basis threatened a move back towards the prior support, around USDX 81.40.”
• Price did indeed move as low as 81.08 over the following trading sessions and hit our target area.  Support was ultimately seen at the confluence of 61.8% Fibonacci and 200 day SMA.
• We still note that 81.40 is a major price pivot zone on the weekly charts and the price action has ultimately seen the dollar index close above this area.  There is potential for a corrective move higher after the strong downside move last week
• The latest commitment of traders report revealed that large specs had cut the long USD wager by around 13% on the week to hit a net $38.5 billion position as of Tuesday.  Speculators had likewise cut the short EUR FX (CME) bet by 38% on the weekly basis, to hit an $8.5 billion position on Tuesday.  This broke the trend of four consecutive weeks, seeing increased bearish positions, and has the common currency around 51k net short contracts.