18 May 2015
DXY resistance seen at 94.00 – BBH
FXStreet (Edinburgh) - The research team at BBH sees the Fed hiking in September and the US Dollar Index finding support at 94.00.
Key Quotes
“The fundamental case for the dollar was based on divergence of monetary policy. This piece remains in place”.
“As the Wall Street Journal survey found, an overwhelming a majority of economists (73%) expect the Fed to hike in September”.
“Meanwhile, there is little doubt that the ECB and BOJ will be continuing to expand their balance sheets under versions of QE well past then”.
“From a technical perspective, the dollar's losses in recent weeks must be seen in the context of the previous 11-month rally”.
“The Dollar Index rallied 27.5% between May 2014 and March 2015. The pullback has been about 7.4%. It has not reached the minimum Fibonacci 38.2% retracement that is often looked for after a large move”.
“That objective is found near 92.20 while the Dollar Index has only approached 93.00 thus far”.
The 92.00 area also corresponds to an objective of the possible double top carved out in March and April (neckline near 96.25). There is not compelling technical evidence suggesting that a low is at hand. Resistance is now seen near 94.00”.
Key Quotes
“The fundamental case for the dollar was based on divergence of monetary policy. This piece remains in place”.
“As the Wall Street Journal survey found, an overwhelming a majority of economists (73%) expect the Fed to hike in September”.
“Meanwhile, there is little doubt that the ECB and BOJ will be continuing to expand their balance sheets under versions of QE well past then”.
“From a technical perspective, the dollar's losses in recent weeks must be seen in the context of the previous 11-month rally”.
“The Dollar Index rallied 27.5% between May 2014 and March 2015. The pullback has been about 7.4%. It has not reached the minimum Fibonacci 38.2% retracement that is often looked for after a large move”.
“That objective is found near 92.20 while the Dollar Index has only approached 93.00 thus far”.
The 92.00 area also corresponds to an objective of the possible double top carved out in March and April (neckline near 96.25). There is not compelling technical evidence suggesting that a low is at hand. Resistance is now seen near 94.00”.