FXStreet reports that the USD has weakened sharply again and the BBG DXY is testing its flagged long-term support at 1194/83 where it should hold for now. An eventual close below that level though would see a further material weakening of the USD over the medium-term, per Credit Suisse.

“The USD has weakened sharply again and the BBG DXY is seeing ‘its big test’ as expected at its flagged long-term supports at 1194/83 – the long-term uptrend from 2011, the series of lows seen through 2019 and earlier this year and the 61.8% retracement of the 2018/2020 bull trend.”

“Whilst our bias for the USD stays lower for an eventual break, this is likely to remain a significant challenge to remove and near-term volatility and consolidation is now expected.”

“Assuming we do see an eventual move below 1183 this would see a major top established to suggest we should see a further material weakening of the USD. We would then see next supports at 1177, ahead of 1150 and eventually 1138.”