Here is their view, courtesy of eFXnews:
Bank of America FX Strategy Research notes that on the surface, the path of least resistance appears to be for a weaker USD as we head into an important week for US data which includes the ISM and non-farm payrolls.
However, on a deeper look, BofAML notes that there are strong emerging signs that this recent move is becoming exhaustive.
that as the USD has finally reached oversold levels for the first time in over a year, the currency has also descending against all of G10 pairs in the process, noticing that this pattern has happened only five times since 2012 and tends to promptly reverse.
“The dollar may also struggle to make a sustained break below its 200-week moving average particularly as US data surprises have continued to improve through July at the same time as the currency falls.
Furthermore, the BBDXY index exhibits a seasonal tendency to rally on average each month into year-end, with November particularly strong over the past year,” BofAML adds.
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