Jan 13 (Reuters) - The rising U.S. dollar's outlook is increasingly positive as recent price action confirms the underlying bullish outlook for an eventual probe of a long-term Fibo above.
The dollar rose on Monday, driving its peers to multi-year lows, after Friday's blowout U.S. jobs report underscored the strength of the economy and muddied the outlook for further Federal Reserve rate cuts this year.
The 14-day momentum reading of the USD index, which tracks the greenback against a basket of six major currencies, has been positive since mid-December.
There is scope for much bigger gains to the major 111.185 Fibo, a 76.4% retrace of the 114.78 to 99.549 (2022 to 2023) drop, as a daily close above which would unmask the 2022 114.780 peak.
If the market slips back below the broken 108.962 Fibo, a 61.8% retrace of the same 114.78 to 99.549 drop, that would warn a major top is in the process of being formed.
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(Martin Miller is a Reuters market analyst. The views expressed are his own)
((martin.miller@thomsonreuters.com))
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