USD Index: Soft close would imply a peak in the short run at least and greater downside risk – Scotiabank

The USD is trading lower. Economists at Scotiabank analyze US Dollar Index (DXY) technical outlook.

DXY is breaking below rising trend support that has guided the market higher through much of May

“USD losses are broad across the G10 FX space and while losses for the DXY do not appear that significant at this point, the index is down for a third session in a row and short-term trading patterns show the index is breaking below rising trend support that has guided the market higher through much of May.”

“A soft close on the day would imply a (technical) peak in the DXY in the short run at least and greater downside risk for the USD after its uninterrupted 3.5% run higher over the month.”