USD to be more stable in 2023 after initial weakness in Q1 – Credit Suisse
The US Dollar is likely to be more stable in 2023 after two years of trending strongly higher. Strategists at Credit Suisse expect further USD weakness in Q1, followed by the development of a broad rangebound environment.
Further USD weakness in Q1, followed by a broad range
“For the DXY, we look for a test of a cluster of supports in the 102.99/101.99 zone – the March 2020 high, the 50% retracement of the 2021/2022 bull trend and importantly the back of the 2017/2022 five-year bull ‘triangle’ pattern. We then look for the DXY to find an important floor here.”
“Our bias is that this will not be the beginning of a fresh move that takes the USD back to its 2022 highs but rather a rally in what we look to be a broader sideways range that we think could dominate all year, especially given that we have just had two years of strongly trending markets.”
“Immediate resistance for a recovery is seen at 105.80/106.00, back above which should further reinforce a range trading environment, with resistance seen next at 107.68/108.00, potentially as far as 110.00/110.45.”
“Should weakness extend below 101.30, this would warn of further weakness to 99/98.98, potentially even back to the 38.2% retracement of the entire 2008/2022 uptrend at 97.94.”
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FXStreet Insights Team
FXStreet
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