Outlook and Forecast: USD – 5 Charts to Consider

The market remains bearish of the USD but the DXY has shown good strength and could be about to breakout to the upside if it does, a big USD bull trend will be confirmed in our view.

Why is the USD firming? One key area is interest rate perceptions (which we have discussed in previous posts) are on the rise in the US and not moving for example in Euro zone.

The USD is also oversold and we can see on the chart below that while some speculators have liquidated shorts recently, there are still plenty of shorts that could get hit on stop. We expect the USD to rise as speculators not only exit their shorts but take up a bullish view and buy the USD.

Technical Analysis

The DXY has limited downside in our view and if we can break resistance at 93.00 we expect a major move to the upside to be confirmed and follow on buying up to 96.00 then 98.00. In terms of pullbacks we see them being held by this weeks low

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