Bank of America Global Research discusses the USD technical outlook and sees a scope for further strength in the near-term.
"We estimate there is some room left for the USD to move higher in the coming weeks as we look for certain retests, measured moves or Fibonacci levels to be reached. The rally in the USD this month is viewed as the start of a stretched short position washout and resolution of oversold momentum conditions. From a technical target perspective we think the BBDXY can rise to 1200/1210, the DXY into the mid 95s and euro should get close to 1.15. New and tactical USD longs considered should BBDXY dip to 1175," BofA notes.
"The risk we continue to face is buying the USD when the medium term trend turned bearish this summer. We anticipate buying euro at/below 1.15 and selling USD with BBDXY > 1200," BofA adds.