That is quite a major technical level on the charts as the post-CPI selloff in the dollar allowed for a strong rally once getting above parity and its 100-day moving average (red line) last week. The question now is, what appetite do buyers have in chasing a further upside leg?
The 200-day moving average (blue line), now seen at 1.0422, is a crucial level in determining that particular bias at the moment.
Keep below and sellers have reason to stay in the game but break above, then perhaps we might find the dollar establishing another leg lower across the board as well.
The first test of the key level yesterday was rejected, not helped by the geopolitical headlines on the Poland missile blast. But today, we will have US retail sales data to come and that might act as another catalyst for markets to get jumpy.
Clearance above the key technical level above will then put the spotlight on the 38.2 Fib retracement level at 1.0610 and key trendline resistance (white line) at around 1.0675 next:
