The US Dollar Index (DXY) recovered from selling pressure earlier in the day to close above the 20-day moving average for the first time in nearly two weeks. Since completing impulsive weakness last week, dollar bulls look poised to retest the late October highs above the 78 handle. Additional strength would expose the 50-day moving average, given bullish diverging daily studies.
The Japanese Yen was the weakest component of the day. The USD/JPY broke-out in late trade once the 20-day moving average was cleared. This marks the first daily close above key resistance in more than 6 weeks. As such, continued strength towards the 50-day moving average is now favored.
The most interesting price-action was not in the fx market, but rather in the metals complex. Both Gold and Silver reached fresh cycle highs before pulling back quite substantially. Gold marked a key reversal day and Silver put in a daily spinning top. Follow-through weakness would trigger further support for the DXY.
