Quek Ser Leang at UOB Group’s Global Economics & Markets Research comments on the recent price action around the US Dollar Index (DXY).
“Two weeks ago, USD Index surged above the Sep’s high of 94.74. This level is also near the top of the weekly Ichimoku cloud and the breach of this key technical level resulted in a sharp and swift rally (note that this is the first time USD Index is above the Ichimoku cloud since Jun last year). Weekly ADX has risen above the 25 level which indicates that the current rally is in a ‘trending’ mode. In other words, USD Index could continue to advance at a rapid clip.”
“The next resistance level of note is at 97.80, the high in Jun 2020. This level is also near to the 61.8% retracement of the multi-month decline from last March (high of 102.99) to the low of 89.21 in Jan this year. On the downside, the previous resistance at 94.74 is acting as solid support now but only an unlikely break of the 55-week exponential moving average would indicate that USD Index is not ready to trend upwards in the months ahead.”
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