COMMENT-Dollar is stuck in a quagmire

The U.S. dollar remains stuck in a quagmire as fundamental and technical picture remains unclear, but there is still a marginal downside bias.

The dollar held steady against a handful of rival currencies on Wednesday, as traders weighed what impact hotter-than-expected inflation data could have on chances of an interest rate cut at the Federal Reserve's June meeting.

The USD index, which tracks the dollar against a basket of six major currencies, continues to trade within the thick daily cloud that currently spans the 102.605-103.498 region. However, the large upper shadow on Tuesday's candlestick line points to an upside rejection.

Those that are bearish need the USD index to register a break and daily close under the daily cloud base as that would unmask the 102.276 Fibo, a 61.8% retrace of the 100.61 to 104.97 (December to February) rise. However, break and daily close above the cloud top would signal a shift in bias back to the upside.