DXY rally is overbought with glaring divergence - UOB
Analysts at UOB Group offer a snapshot of their outlook for DXY, EUR, AUD and GBP.
Key Quotes:
"After enduring persistent selling across the whole of last year, the USD started to stage a strong rebound since Apr, with the DXY lifted from 89 to 95.
Concurrently, DXY positioning has now flipped into a net long. In terms of our technical indicators, the DXY rally is overbought with glaring divergence; risk for a short-term top has increased. A pull-back could carry the DXY lower to the major support zone at 93.40/60. "
"We stay positive on EUR and AUD after they have endured a fairly sizeable liquidation in long positioning. On the other hand, given the on-going uncertainties over Brexit, we stay cautious on the GBP as it remains at risk of further extension in net short positioning."