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DXY Through Uptrend Support

USD

Note that the DXY index closed below uptrend support drawn off its May ’21 lows on Wednesday.

  • The DXY topped out in late November and has faltered even against the backdrop of the well-documented hawkish Fed re-pricing.
  • This would suggest that positioning and the relative impact that Fed expectations have on broader market expectations re: other central banks may be inhibiting the USD at present.
  • On the former, cumulative net USD longs remain elevated (based on CFTC CoT data), sitting at levels not witnessed since late ‘18/early ’19, even with cumulative net USD length pulling back since late November (if we exclude the recent peak).

Fig. 1: USD Index (DXY)

Source: MNI - Market News/Bloomberg

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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