By eFXdata — Jan 12 - 01:30 PM
TD Research maintains a bullish bias on the USD over the coming weeks.
"The outlook for the USD balances a mix of positive and negative forces where the Fed has taken center stage. We're now about 60 days out from the first Fed hike, underscoring another 2% rally in the USD. Our factor-based model (MRSI) has also highlighted the recent pivot in market themes to rates and risk. That said, the USD has to compete with other central bank hikes, and we also note the USD's rich to slower-moving models," TD notes.
"In the end, we expect more front-loading of USD strength early this year and shorter market cycles, given the fluid nature of COVID and the associated shifts in mobility. For EURUSD, that means keeping an eye on valuations and equities but fading rallies to start the year. The bottom probably sits around 1.10," TD adds.
TD Bank Research/Market Commentary