Bank of America Merrill Lynch Global Research discusses the USD technical outlook and likes going short in the near-term before buying this USD dip at support levels around the Sept 18 Fed or so-called scheduled October trade talk.
"The persistent trends of the summer are correcting. The bond market is declining into the Fed as signaled by rare and deep technical overbought conditions . Similarly, enthusiasm to continue pushing the USD (BBDXY) higher lacked starting September. The impulsive triple breakout ending the week of August 30th formed a bullish triangle, however the first week of September formed a bull trap that threatens new longs," BofAML notes.
"Given this impulsive breakout and bull trap, our bias is to sell USD for the short term and at a support level into the Sept 18 Fed or so-called scheduled October trade talks, buy USD," BofAML adds.