With all the talk of stock market highs and a historic halving of the price of crude oil in six months, a pretty dramatic move in a pretty important index was confirmed over the holidays.
The U.S. Dollar Index in the closing weeks of 2014 took out its 2008 high of 89.71 and breached its 200-month moving average. The last time the Dollar Index was above its 200-month simple moving average was September 2003. Now it is poised to challenge a double top from 2004-05 at 92.50 (see chart).
If you recall, the dollar was in a freefall from 2001 through 2004. In 2005 the dollar began a strong upward correction that failed at the 92.50 level, matching a 2004 correction high. If resistance at 92.50 is taken out the dollar will have a lot of upward technical room to roam.
The dollar has taken out important long-term technical resistance points throughout this rally that began this past summer but the 92.50 would be the most important and would an even greater upward move.