Quek Ser Leang, of Global Economics & Markets Research at UOB Group, comments upside potential in the US dollar.
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“When the DXY index rose above the April high of 93.44 in mid-August, we highlighted on our chart for the day (August 19, DXY index at 93.45) that” the next rally in the DXY index has probably started. ” , “Just an unlikely breakout of 91.80 would indicate that the DXY index is not ready to head higher.” Our expectations that the DXY index rallied did not materialize as it dipped to 91.95 before rebounding. “
“Momentum to the upside has improved considerably and the DXY index is likely to strengthen further even though strong resistance can be expected at 94.74 (September last year’s high). That said, in view of the strong momentum, we are expecting a breakout of 94.74. A clear breakout of 94.74 would increase the odds of the DXY index moving above the top of the weekly Ichimoku cloud (currently at 95.00). Note that the DXY index has held below the cloud since May last year. “
“In order to maintain the current strong momentum, any pullback should ideally hold above 93.20. However, only a breakout of the key support at 92.60 would indicate that the risk to the upside has dissipated. Going forward, if the index DXY closes above the top of the weekly Ichimoku cloud, could herald a period of strength for the DXY index in the coming months. “
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