FXStreet (Edinburgh) – In the opinion of analysts at BAML, the US Dollar Index (DXY) remains well supported in the 94.80 area.
Key Quotes
“The short term backdrop for the broad USD picture improved over the past week with the extension through a number of critical resistance levels”.
“These breaks along with the impulsive bias to the price action suggest at least a short term low in place with a growing risk that the corrective declines from the March highs are now complete”.
“A key highlight for the improved setup is the advance above the important 95.90/96.33 resistance area for the DXY. This zone represented the 38.2% retracement from the March high, the former range lows from March/April and the breakdown area from late-April”.
“Given the break above this strong confluence of resistance, a closer test of the critical 98.42/68 resistance area seems likely. As this area represents the mid-April highs as well as the key 76.4% retracement of the decline from the March peak, it should define whether a retest, if not break of the 100.39 March high can develop”.
“In line with the improved setup, note that a Friday close above 94.83 would confirm a bullish reversal month for May consistent with an improved medium term backdrop. Key initial support now rests with the 94.82/23 levels which includes last Friday’s reaction low and the 76.4% retracement of the May advance”.
(Market News Provided by FXstreet)