USD: Technicals warn of coming dollar bounce - BBH

The US dollar had been sold hard in the second half of December through last week and regardless of one's medium or longer-term views, the technical indicators warn that the sell-off is stretched and in need of consolidation, if not a correction, according to Marc Chandler, Global Head of Currency Strategy at BBH.

Key Quotes

“The Dollar Index has formed a shelf near 91.75.  Recall that the 91.55 area, which was briefly violated last September, marks the 50% retracement of the 2014-2016 rally.  The 61.8% retracement is near 88.40.  A move above 92.30 may be needed to lift the tone.  We see the 92.60-92.85 area as an important area.   The RSI has already begun moving higher and the Slow Stochastics are set to turn higher.  The MACDs remain soft.”