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.
Executive Summary:
- The USD remains in a firm uptrend and this is clearly highlighted in the USD Index (DXY).
- Recent gains in the index has seen the price trade above a key resistance and this reinforces the current bullish theme.
- Furthermore, a broad reversal pattern in the shape of a double bottom highlights a favourable medium-term outlook for bulls.
The USD Index (DXY) remains in a firm uptrend as it extends the recovery from 91.95, Sep 3 low. On this day, we discussed the importance of the area below the 50-day EMA as a support. The recovery since has confirmed a fresh bull cycle and more importantly suggests the 4-month uptrend that started May 25 remains intact.
Additional technical factors that reinforces this bull theme are:
- The 20- and 50-day EMA set-up is in a bull mode.
- A bullish price sequence of higher highs and higher lows remains intact and this defines an uptrend.
- Momentum studies are rising and importantly these indicators are not currently highlighting any potential trend threats.
Attention is on key resistance at 93.73, Aug 20 high that has been probed today. A clear break of this hurdle would confirm a resumption of the underlying uptrend and also reinforce the broad based bullish USD theme that is currently in play. This would expose:
- RES 1: 94.30 High Nov 4, 2020
- RES 2: 94.47 38.2% retracement of the Mar '20 - Jan '21 downleg
- RES 3: 94.74 High Sep 25, 2020
Double Bottom Reversal
From a medium-term perspective, a breach of 93.73 would also reinforce the broad double bottom reversal pattern that appears to have developed this year. The midpoint is the Mar 31 high - a clear break of this 93.44 high would confirm the reversal pattern. Furthermore, the pattern, if correct, suggests the USD is in the early stages of a broader recovery
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.