The US dollar has suffered a couple of blows, from durable goods orders and pending home sales to name a few.
However, the team at Bank of America Merrill Lynch is bullish on the greenback and also suggests selling rallies in gold.
Here is their view, courtesy of eFXnews:
Bank of America Merrill Lynch is bullish the USD and long the greenback against both the AUD and NZD.
“While, the USD weakness over the past two days was not expected, a medium and long term look at the USD index says stay the course,” BofA argues.
“Upside targets are seen to 89.62/91.48 while the old 2012/2013 highs at 84.10/84.75 should now limit pullbacks,” BofA projects.
Meanwhile, BofA is bearish on Gold and looking to sell any bounce over the coming days.
“The reversal from 1241/1252 area resistance says the MTD corrective rally is finished and the larger bear trend has resumed. While the not-yet-complete, intra-day impulsive decline from 1255 says it may be several days before we see a gold bounce, bears should stay patient before acting,” BofA advises.
“A corrective rally could prove substantial and could extend to, but not exceed, the Oct-21 high of 1255.37 before resuming lower. Once complete, downside targets are seen to the Jun’13 low of 1180 and potentially below to 1087 and even 956,” BofA projects.
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