US Dollar Index Analysis

US Dollar Index Analysis

Quek Ser Leang from the UOB Group Global Economy and Markets Survey shared his views on the expectations of the US Dollar Index (DXY) ... “First, two months ago, we detected weakness when the USD Index was at 97.45. In the update from 03 Jun 20, we have made clear that the USD Index outlook is negative and the next support is at 95.50. The USD Index later dropped to the level of 95.72 and traded horizontally. We are of the opinion that the overall downward trend in the current movement's USD Index is lower in the next foot. At that time, we noted that the 6-year rising trend line at 94.30 was a critical boost. We stressed that the general technical indicators clearly indicated a weaker US Dollar in the coming months. ” “The USD Index broke its critical support at 94.30 last Monday and dropped by -4.15% on Friday, July 31, to 93.35 in a few days. This decline was the biggest one-month drop in a decade. " “The question from here is whether USD Index can maintain the current furious pace of decline as weekly RSI is already at its most oversold levels. This indicates that the downward momentum is still strong and the next support is not until 91.50. This level is another critical boost as it has not been on a rising trend line since 2011. Although the critical support break was not overlooked, the oversold conditions on the weekly chart show that the lowest level of 2018, 88.25, will not be on the table for at least the next 1-2 months. Increasing resistance at 96.30 and then at 97.65. The second level acts as a solid resistance and may remain intact for the next few months, although probably not longer. "