The DXY $ Index, which has a higher EUR weighting, has briefly declined below the key support at 92.62/25 where fresh buying has been found, notes Credit Suisse.
"Resistance for a recovery is pegged at 93.92 initially. Only above 95.20 would mark a near-term base," CS argues.
"However, with monthly MACD negative, the broader risk is seen lower," CS adds.
A clear break below 92.25, according to CS, would mark the completion of a large “double top”, reinforcing the bearish outlook for the USD for 89.71 initially, ahead of 89.62/12 – the 38.2% retracement of the entire bull market from 2008 - which should hold at first but a break below can target the 40-week average at 88.00.
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