Investavenue//
By Ian Stannard from BNP Paribas
The USD has broken up through the descending trend channel developed since early July targeting new highs. The previous resistance line has converted to support and currently intervenes at 115.35.
• From its 17 of September low it has developed an ascending trend identifying 117.55 as its first target. Momentum indicators are pointing sharply higher and the 9-week RSI is expected to break trend line resistance.
• Strategic support is seen at 114.55. Only a break of this level reverses the technical outlook and would signal a move to 109.75, defined by the lower boundary of the ascending trend channel coming up from the lows traded in September 1998.
• Our flow and fundamental approach support the technical bullish USD outlook. Portfolio flows have become USD supportive as investors react to the flexible US monetary and fiscal policy approach. Within this context the US economy is well placed to lead the global economy out of the sluggish demand environment.
• Yen weakening intervention might soon become a top theme on currency markets.