To surf, you have to wait for a sufficiently large wave to appear. And once you're close to the beach, like the ebb, you have to turn around and look for a new wave. In the stock market, movements follow the same rhythm. Just because an underlying trend is bullish doesn't mean that there aren't regular downward counter-movements to let the market breathe before resuming its forward march.

In our case, the dollar trend is now rather bearish since the break of 105.50 and 104.65. However, looking at many crosses, we can find a common denominator: the first supports are not far away. To illustrate this, let's start with the dollar index. We'll be watching the 102.50/20 zone for possible intermediate bounces, which should however be limited to 104.65. The same applies to commodity currencies: the kiwi and the aussie have reached their targets at 0.6190 and 0.6700/10, resistances which, in view of the overbought daily indicators, could trigger some natural profit-taking.

Lastly, the USDILS also presents an interesting configuration to watch. After hitting the upper limit of its linear regression channel, which has been in progress since 2021, it tested the second standard deviation from below, which also coincides with the 55-week moving average and support around 3.66. At the same time, the RSI is resting on its neutrality zone around 50/48, while a potential reversal figure (hammer on Japanese candlesticks) is forming. All these elements militate in favor of Israeli shekel weakness towards 3.84/88 initially.


Source : Bloomberg