Analysts at Brown Brothers Harriman explained that the dollar's technical tone is improving.
"Looking at the Dollar Index, there have been three favourable technical developments. "
"First, the spike low recorded in the middle of last week; the brought the Dollar Index to its lowest level in the US election last November, was not confirmed by the technical indicators, leaving a bullish divergence."
"Second, the reason it was not confirmed was that the dollar reversed higher (perhaps a hammer candlestick). "
"Third, the five-day moving average cross above the 20-day average for the first time in a month. The immediate cap is in the 97.70-97.80 area."
"Overcoming it would target 98.50, the last significant hurdle ahead of 100. A break of 96.80 on the downside warns that more work needs to be done. "
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