USD sentiment remains bullish. Economists at Scotiabank analyze Greenback’s outlook.

Technical signals suggest the rise may slow in the short run

The broader USD trend higher is elevated and looks overextended but evolving market sentiment and positioning suggest the USD rise could well extend further.

Technical signals suggest the rise may slow – at least – in the short run. The intraday chart shows the DXY reversing from the top of the bull channel that has guided the index higher since July. Losses may not extend much more than 0.4-0.5% while elevated US yields are driving sentiment, however.