Market Economics | Interest Rate Strategy - BNP PARIBAS ...

Chart 2: US Dollar Index (DXY) – Double-top targets a decline towards 76.25
DXY posted a doubletop
during Nov/Jan, 89
88.35
now favouring a
deeper medium-term 87
decline toward the
76.25 double-top 85
83.55
objective. Accelerating
83
bearish weekly
81.45
momentum risks an 81
even larger dive
towards 75.50 and 79
80.10
potentially 74. Use
short-term rebounds 77
towards 79.50-80.00
75.65
75
resistance to initiate
31-May-10 28-Jul-10 24-Sep-10 23-Nov-10
DXY short positions.
Source: BNP Paribas
USDMXN has
posted a sharp
decline during the
past 6 weeks
breaking long-term
12.0440 Fibonacci
support and trading
at levels last seen
during the Lehman
crisis.
This decline saw
USDMXN become
deeply oversold. We
now expect a rebound
off the recent 11.9440
low towards the
12.17-12.23 area.
Source: BNP Paribas
USDTRY has broken
sharply lower through
November’s major
uptrend support.
The bearish trend
reversal has been
validated by the further
break below 1.5375
key support.
We now expect a
multi-week decline
towards 1.5150-1.49.
Use short-term rallies
towards the 1.56-1.57
area to enter sell setup.
Chart 3: USDMXN – Rebounding off multi-year low
13.60
13.40
13.20
13.00
12.80
12.60
12.40
12.20
12.00
11.80
11.60
13.40
31-May-10
12.10
13.20
12.45
28-Jul-10
13.25
24-Sep-10
12.15
Chart 4: USDTRY – Breaking lower through major uptrend
1.65
1.60
1.55
1.50
1.45
1.40
1.35
1.5965
21-May-10
1.6065
1.4810
20-Jul-10
1.5355
16-Sep-10
1.3830
12.60
23-Nov-10
1.5920
19-Nov-10
81.30
20-Jan-11
11.95
20-Jan-11
1.5935
20-Jan-11
Source: BNP Paribas
Andrew Chaveriat 20 January 2011
Market Mover, Non-Objective Research Section
64
www.GlobalMarkets.bnpparibas.com