1Finance

While Bank of America Merrill Lynch didn't expect the USD Index DXY to remain within its recent corrective range trade (currently consolidating between 99.92 & 96.58), BofA now thinks that this longer than anticipated consolidation has done no damage to the larger bull trend.

"Absent a sustained break off 96.58/95.94 we look for a bullish resolution towards 103.85 (Triangle objective) ahead of 106.00 (long term upside target)," BofA argues.

It is a slightly different story for GBP/USD, according to BofA, as the setup here is for a more directional correction higher.

"In the sessions ahead we look for a push to 7m channel resistance at 1.5232 ahead of swing targets at 1.5350 and potentially beyond before the long term downtrend resumes for a push towards 1.35/1.40 (secular range lows), BofA projects.



Turning to EUR/USD, BofA advises bulls to watch the 55d average around 1.0992.

"While we remain long term EUR/USD bears, targeting 1.0283/1.000, in the near term the pair is stuck in a choppy corrective range between 1.0462 (Mar-16 low) and the 55d avg (now 1.0992)," BofA notes.

"Bulls need a sustained break of the 55d to point to a greater correction than anticipated, exposing the 1.1261/1.1534 February congestion zone," BofA advises

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