FXStreet (Bali) - JP Morgan FX Strategists offered their technical outlook on DXY, noting that while the reversal from the medium term range lows is intact, a break through the 80.09/81.14 is necessary to confirm a more sustained advance.

Key Quotes

"Despite signs of an improved backdrop, the broad USD picture remains mixed as rallies continue to struggle. While important hurdles are holding, we continue to see potential for the bullish story to develop in the coming weeks and months. In line with the upside view, the reversal from the May lows continues to stand out as the critical bullish factor. Again, this followed the effective test and hold of several critical support levels including the 79/78.60 area for the DXY, the 83.60 zone for the JPM USD Index, as well as the 1.38/1.40 zone for EUR/USD. While intact, the potential bullish risks for the USD are expected to prevail as the focus stays on the next line of key resistance levels."

"In turn, the focus stays on the DXY and the critical 80.90/81.14 resistance area. This area includes the June highs and the 38.2% retracement of the decline from the 2013 peak. Upside breaks imply the onset of another up- leg to the developing advance from the May low. Also, note that the JPM USD Index should continue to find solid support in the 83.60/40 zone which represents the 76.4% retracement of the rally from the October ’13 low and should be a max for any deeper pullback. The 84.70 resistance zone which includes the June/April highs should define whether an important low is in place and a deeper retracement to the decline from the February peak is underway - still the preferred view."

Related Articles
  1. Forex Education

    Four Currencies Under the Spotlight in 2016

    With currencies having become the “tail that wags the dog,” in terms of their impact on the global economy, these four currencies will be under the spotlight in 2016.
  2. Forex Fundamentals

    These Currencies Are The Biggest Losers Of The Stock Downturn

    Here’s a list of the hardest-hit currencies amid the global stock market mayhem.
  3. Forex Strategies

    Will the Euro Continue to Rally? (EUO)

    The euro is rallying. Should investors chase this performance or is the real opportunity on the other side of the trade?
  4. Investing News

    China’s Forex Reserves Dropped Significantly

    China’s forex​ reserves dropped by a record $93.9 billion at the end of August to $3.56 trillion because the Central Bank has been selling dollars to provide a cushion to the falling yuan​
  5. Forex

    The Pros and Cons of a Fully Convertible Rupee

    Amid the rising economic power of India, the talks of making the Indian currency fully convertible are gaining momentum. We look at the pros and cons.
  6. Forex Fundamentals

    Chinese Yuan an Unlikely Reserve Currency

    As the world's second largest economy, China's challenge to America’s dominance includes a push to make the yuan (RMB), the world’s reserve currency. Whether it can do that now is unclear.
  7. Economics

    How Currency Enforcement Helped Sink The Trans-Pacific Partnership (TTP)

    One particular barrier to trade that has received much attention of late and caused delays in negotiations of the TPP is exchange-rate manipulation, by which a country artificially devalues its ...
  8. Forex

    Top U.S Forex News Sites

    Breaking news moves forex markets. Here are the top U.S. sites for tracking forex news.
  9. Investing

    Financial News Comparison: Bloomberg Vs. Reuters (BAC, GOOG)

    Access to financial information has grown with the expansion of digital news. Bloomberg and Thomson Reuters lead the pack, claiming a majority of the business information market.
  10. Economics

    Who Benefits From South Korea's Lowered Interest Rates?

    South Korea is the latest country to cut interest rates in an attempt to stimulate economic growth.
COMPANIES IN THIS ARTICLE
Trading Center