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12 Jun 2013
Flash: Increased risk of deeper USD rally phase - JPMorgan
FXstreet.com (Barcelona) - While the short term setup in the USD can allow for some pause, the broad-based strength implies, in view of JPMorgan FX Strategist John Normand, an improved technical backdrop that may lead to a deeper rally phase underway.
Normand notes: "Consistent with the trending bias and potential for further upside, the 84.95 area for the DXY will be the next important tests for the USD view. This level represents the 76.4% retracements of the declines from the 2010 highs. Upside breaks should confirm the continuation of the current rally phase and potential for a more sustained medium term shift."
Still, the critical test rests with the 86.15/20 zone for the DXY, the Strategist adds: "This area represents the trendline resistance from the 2005 high, as upside breaks would imply the price action since that timeframe is a large basing pattern."
Normand notes: "Consistent with the trending bias and potential for further upside, the 84.95 area for the DXY will be the next important tests for the USD view. This level represents the 76.4% retracements of the declines from the 2010 highs. Upside breaks should confirm the continuation of the current rally phase and potential for a more sustained medium term shift."
Still, the critical test rests with the 86.15/20 zone for the DXY, the Strategist adds: "This area represents the trendline resistance from the 2005 high, as upside breaks would imply the price action since that timeframe is a large basing pattern."