The USD looks set to snap its three-week losing streak, reflecting a shift in technical factors rather than macro ones, according to analysts at TD Securities.
“The market continues to give the US a pass on the trade war theme. Protectionism will have global implications but for now, a mix of foreign deleveraging and fiscal stimulus has offered some cover in the short-run. Data and earnings are the next big test for the market.”
“A mix of QT and tighter liquidity have exasperated the price action. Tracking indicators of CTAs show poor annual performance. It also appears that they missed the recent USD rally, leaving markets to push a trend in the very short-run. This could reinforce the USD bid, leaving markets to eye the recent highs in the DXY for direction.”
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