Further gains expected above 92.55 – UOB

0


Quek Ser Leang of UOB Group Economics and Global Markets Research noted that the DXY could see its rally accelerate to a breakout of the 92.55 level.

Key quotes

“In our chart of the day of May 19, 2021 (when the USD index was trading at 89.75), we expected the USD index to ‘head to the early January low at 89.21’. We stressed that “for the USD index to move to 89.21, it must maintain the current rapid rate of decline and must not exceed the resistance to the downside of the trendline (currently at 90.65)”.

As the USD index then fell to 89.54, it turned around and not only broke the trendline mentioned above, but last week it also broke the major trendline connecting the March 2020 high (102.99) and April high of 93.44. The sharp rise resulted in a huge weekly gain of + 1.84%, its largest one-week advance in about 9 months . “

“The weekly MACD has turned positive again and the USD index is currently holding close to the exponential 55-week moving average (currently at 92.55). While the moving average has thwarted the advance of the USD index in April, the strong surge in momentum this time around suggests that a breakout of 92.55 is likely. A weekly close above 92.55 would greatly increase the chances of the USD index moving up further to 93.44 during those two months. Note that the USD index has remained below the exponential 55 week move since June of last year. Support is at 91.50, but only a breach of 90.85 would indicate that our expectation of a stronger USD index is wrong.



Source link

Share.

About Author

Leave A Reply