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Sep 03 - 12:55 PM

USD: Is It Time To Speculate On The USD Bouncing Back? - BofA

By eFXdata  —  Sep 03 - 10:45 AM

Bank of America Global Research discusses the USD technical outlook and flags a scope for buying the USD tactically in the very near-term, expecting its recent bounce to be short-lived ahead of the Fed meeting on Sept 16.

"The decline in the USD during the last week has pushed five of the ten members of the Bloomberg US dollar index into oversold territory. With momentum starting to look stretched we review the daily charts and found four tactical reasons to buy the BBDXY. Reasons include a three troughed bullish divergence, a TD Sequential buy signal on Aug 31 with a risk level of 1154 still holding, a Doji candle formed on Sept 1 and the daily price chart may form a bullish wedge pattern," BofA notes.

"The risk to buying the USD is the medium term trend turned bearish this summer. This is because decade long trend line support was broken, the July death cross and a bearish wave count discussed last month The risk we see is the USD bounce back is short lived due to the Fed meeting on Sept 16 and/or real money that is still selling," BofA adds. 

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Source:
BofA Global Research

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