Jan 6 (Reuters) - The U.S. dollar failed last week to sustain a break above a key technical level, which could be an early warning that the recent uptrend may be coming to an end.
The dollar fell on Monday from around a two-year peak, as traders reversed some of the rally seen during the holiday period ahead of key data this week.
The USD index, which tracks the greenback against a basket of six major currencies, last week broke but failed to close above the major 108.962 Fibo, a 61.8% retrace of the 114.78 to 99.549 (2022 to 2023) drop. That is a possible "bull trap", set when a market breaks above a level but subsequently reverses, and is usually a bearish sign.
However, those that are bullish on the USD index can take solace from the fact that it has risen in January in 15 of the past 25 years. Its 14-week momentum reading also remains positive.
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(Martin Miller is a Reuters market analyst. The views expressed are his own, editing by Ed Osmond)
((martin.miller@thomsonreuters.com))
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