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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
USD
The latest round of broad USD strength, facilitated by EUR/USD tumbling below $1.1300, has resulted in the DXY moving to the highest level witnessed since Jul '20.
- Tuesday saw the DXY register a convincing break above the upper confines of the bull channel drawn off the May 25 lows. The subsequent USD strength witnessed in Asia-Pac trade has allowed the DXY to look above the 50% retracement of the move from the Mar '20 high to the Jan '21 lows (96.100). A clean, sustained break through here would give bulls room to focus on the 61.8% retracement of the same move (97.727).
- Note that the DXY has moved into overbought territory, with the 14-day RSI above the 70 level. Any retracement back below the 70 line is seen as a bearish threat from a technical perspective.
- The latest round of USD strength of course follows a firmer than expected round of U.S. CPI data for the month of October (registered last week), while the broader set of U.S. economic data releases has also outperformed in recent times, with Citi's U.S. economic surprise index improving to levels not witnessed since June '21. OIS currently fully price a 25bp Fed hike by the end of the central bank's Jul '22 meeting.
Fig. 1: DXY Index
Source: MNI – Market News/Bloomberg
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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