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US dollar index retreats beneath 200-day SMA
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Stochastics and RSI suggest more decreases
The US dollar index is posting aggressive selling interest after pulling back from the 50-day simple moving average (SMA) and the 104.50 resistance level a few hours before the Fed interest rate decision. Also, the index is currently falling falls below the simple moving averages (SMAs) and remains well below the ascending trend line.
The technical oscillators are confirming the bearish scenario. The stochastic is plummeting from the overbought region with strong momentum, while the RSI found resistance at the 50 level and is ticking south.
More downside pressures could open the door for the bears to push the market until the previous trough of 103.30, ahead of 102.80, achieved on March 21.
Alternatively, an upside rally beyond the SMAs and the 104.50 barrier could make investors optimistic about meeting the 105.80 resistance level. A step higher would change the outlook back to bullish, hitting the 106.35 top.
To sum up, the dollar index has been in a bearish trend since the beginning of May, as confirmed by the move below the 200-day SMA.
