BUZZ-COMMENT-Dollar has to climb further to negate fears of a top

Jan 8 (Reuters) - Traders should be mindful that U.S. dollar's price action last week could be an early warning that its recent uptrend may be coming to an end. The dollar has to climb above its recent two-year peak in order to negate fears of a top in the currency.

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.

This week the dollar has pushed higher, while other major currencies languished near multi-month lows after strong U.S. data drove a spike in bond yields and pared some bets on Federal Reserve rate cuts. However only a break above the 2025 109.54 peak would negate the "bull trap" and confirm the overall bias has shifted back to the upside.

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(Martin Miller is a Reuters market analyst. The views expressed are his own)

((martin.miller@thomsonreuters.com))