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Amid news that German Chancellor Angela Merkel would finally be able to cobble together a coalition government, the EUR/USD has found itself shaking off whatever political risk that it's carried since the September elections. EUR/USD break above 1.2100 today signals not only a fresh high for 2018, but its highest exchange rate in three years.

To no surprise, given that the Euro is 57.6% of the DXY Index, the aggregate gauge of the US Dollar has been slammed lower today, taking out not only the yearly low but the low from the September 20 FOMC meeting day as well. Now that this bullish outside engulfing bar's support has been broken, there is little standing in the way of the DXY Index taking a trip down to the 2017 low at 91.01.

Early price action in 2018 suggests that, for now, a bearish outlook for the US Dollar remains appropriate. On the daily timeframe, MACD and Stochastics continue to trend lower in bearish territory, while price holds below the daily 8-, 13-, and 21-EMAs.

A closer look reveals that during the early-2018 rally by the US Dollar, the DXY Index never crossed the daily 21-EMA; until we see a close back above this moving average, there is no reason to think that this current stretch of weakness for the greenback is finished.