USD Index: Weekly close below 110.05 to suggest a more concerted phase of corrective weakness – Credit Suisse

The US Dollar Index continues to lose significant momentum. Economists at Credit Suisse are highly alert to the formation of a top, which would be confirmed on a weekly close below 110.05.

USD is seen highly at risk of completing a top

“DXY has broken support from its 55-day average and with weekly MACD having crossed lower we remain of the view a top may be close to completing. A weekly close below the 110.05 October low should confirm to suggest the USD is set for a more concerted phase of corrective weakness for a fall to support at the 23.6% retracement of the 2021/2022 uptrend at 108.74. Whilst we would look for this to hold at first, below in due course can see support next at 107.68 and eventually the 38.2% retracement and 200-day average at 105.01/104.57.”

“Above 113.15/35 is now needed to ease thoughts of a top for a retest of the 114.78 high. Beyond this latter level can reassert the core uptrend with the ‘5-year measured triangle objective’ seen at 118.37.”