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19 May 2015
USD Index risks a broader consolidation – JPM
FXStreet (Barcelona) - The Team at JP Morgan, believes that the corrective phase for USD Index risks a broader consolidation phase ahead before the upside resumes again.
Key Quotes
“Note that while the medium term upside bias is intact, the current corrective phase suggests raises the risk that a broader consolidation may develop before the uptrend resumes.”
“For the DXY, the recent violation of the 96.33/17 as well as the 93.80/25 February range lows affirmed a deteriorating backdrop. In turn, the focus is now on 92.18 which is the 38.2% retracement of the rally from the 2014 low. In line with the current oversold setup and waning bearish momentum, this area should allow for a retracement.”
“While the 95.25 area will act as key initial resistance, an extension above the important 95.95/96.33 area and recent breakdown zone is necessary to confirm a deeper lift. This potential upside break would also raise the risk that a deeper retracement is due.”
“Alternately, a violation of the 92.18 support should allow for a closer test of the 90.50/89.65 zone (200-day moving average and 50% retracement from the 2014 low).”
Key Quotes
“Note that while the medium term upside bias is intact, the current corrective phase suggests raises the risk that a broader consolidation may develop before the uptrend resumes.”
“For the DXY, the recent violation of the 96.33/17 as well as the 93.80/25 February range lows affirmed a deteriorating backdrop. In turn, the focus is now on 92.18 which is the 38.2% retracement of the rally from the 2014 low. In line with the current oversold setup and waning bearish momentum, this area should allow for a retracement.”
“While the 95.25 area will act as key initial resistance, an extension above the important 95.95/96.33 area and recent breakdown zone is necessary to confirm a deeper lift. This potential upside break would also raise the risk that a deeper retracement is due.”
“Alternately, a violation of the 92.18 support should allow for a closer test of the 90.50/89.65 zone (200-day moving average and 50% retracement from the 2014 low).”