It’s been awhile, but the US Dollar Index did something today that it hasn’t done in nearly a year. As shown in the chart below, today’s rally in the greenback put the index above its 200-DMA for the first time since May 12, 2017. While the gains of over 3% in the last two weeks have been impressive, the dollar still has a lot of ground to make up before working its way out of the current downtrend. Will a hawkish Fed on Wednesday help to continue the rally or will a dovish sounding Fed stop the rally in its tracks?
At a length of 252 trading days, the US Dollar Index’s streak of closes below the 200-DMA was the seventh longest in the history of the index dating back to 1971 and the longest since 2011 (257 trading days). The longest streak occurred back in the mid-1980s and stretched 546 trading days from May 1985 through August 1987. What was even more impressive about that streak is just two weeks after it ended another streak of 209 days started.