The US Dollar index is on the move higher once again. Below is a six month candle chart of the dollar. As shown, after “hooking” lower since mid-January, it’s breaking out above its prior highs this morning. The prior highs from January should now act as support going forward.
Meanwhile, after going down pretty much every day for months, oil is actually starting to form a nice base around the $50/barrel mark. The commodity has yet to push higher and start to make a dent in its huge losses over the last year, but it has stopped going down for now. As you can see in the chart below, the “base-building” action for oil has allowed its 50-day moving average to catch up to its price. Over the last couple of weeks, oil has been tracking right along its 50-day. Traders will be watching the price action very closely in the coming days to see if it can finally bounce off of this support level. A break above its highs from February would be a bullish technical signal.