TD Research maintains a bullish bias on the USD over the near-term.
"In the near-term, we still like the broad USD higher, reflecting the impact of higher US rates, existing USD shorts on our positioning models, and the disruption of pivoting between market themes/ narratives," TD notes.
"We still believe we're in the middle of the pivot to the 2021 macro divergence trade from the 2020 liquidity trade. The transition itself is bullish for the USD in the very short-run since the legacy 2020 trades are one-dimensional: short USD and long risk... This week's Fed meeting will be an interesting risk event, but we don't think it will alter the course of this transition," TD addsa.