Credit Suisse, one of the world’s leading financial services providers, has predicted that the USD Index will break trend support at 101.90 and undergo a retest of the 100.82 YTD low. This prediction has significant implications for investors and traders who are involved in the foreign exchange market.
The USD Index is a measure of the value of the US dollar relative to a basket of other currencies. It is calculated by taking the weighted average of six major currencies: the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc. The index is widely used by traders and investors to gauge the strength or weakness of the US dollar against other major currencies.
According to Credit Suisse, the USD Index has been in a downtrend since March 2020, when it peaked at 102.99. Since then, it has been making lower highs and lower lows, indicating a bearish trend. The bank’s analysts believe that the index is likely to break below its trend support level of 101.90, which would be a significant bearish signal.
If the USD Index does break below its trend support level, it could trigger a retest of the YTD low of 100.82. This would represent a decline of around 1% from its current level of around 102.00. While this may not seem like a significant move, it could have important implications for investors and traders who are exposed to the US dollar.
A weaker US dollar could benefit US exporters, as it would make their goods more competitive in international markets. It could also boost commodity prices, as many commodities are priced in US dollars. On the other hand, a weaker dollar could make imports more expensive for US consumers, which could lead to higher inflation.
For investors and traders who are involved in the foreign exchange market, a weaker US dollar could present opportunities for profit. For example, they could buy currencies that are expected to appreciate against the US dollar, such as the euro or Japanese yen. Alternatively, they could short the US dollar by selling USD Index futures or options.
In conclusion, Credit Suisse’s prediction that the USD Index will break trend support at 101.90 and undergo a retest of the 100.82 YTD low has significant implications for investors and traders who are involved in the foreign exchange market. A weaker US dollar could have both positive and negative effects on the US economy, and could present opportunities for profit for savvy investors and traders.
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