USD Index may be nearing some decent support levels – ING
|A further unwinding of long US Dollar positioning remains the risk, but economists at ING think the US Dollar Index is getting close to some decent support levels.
US Dollar approaching support levels
“Buy-side surveys taken right before the big sell-off on 10/11 November still had long Dollar positions as 'the most crowded trade' and saw the Dollar as the most over-valued on record. We doubt those views will have changed that much and the buy-side will now be eager to sell any USD rallies, believing the Dollar may well have peaked. That may be the case, but we doubt conditions will be in place for a major USD bear trend.”
“We think DXY has strong support near 105.00, marking the 200-Day Moving Average, important lows in early August and a big 38.2% retracement level of the whole rally from summer 2021 (when the Fed started this dollar rally with its more hawkish Dot Plots).”
“For those needing to buy US Dollars, DXY levels near 105 may be as good as any.”
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