U.S. dollar: Most oversold in 40 years, tactically neutral – Morgan Stanley

FXStreet reports that in its latest client note released on Friday, analysts the US investment banking giant, Morgan Stanley, switched its bearish stance on the US dollar to tactically neutral, as the greenback remains at the most oversold level in over four decades.

The bank exited its short position on the dollar index while closing out its long positions on the euro and Australian dollar against the greenback.

“A sentiment gauge called the Combined Market Timing Indicator was now giving a ‘sell’ signal for the first time since January 2018.”

“With global markets appearing tactically stretched a sell signal on our MTI (market timing indicator) would certainly add to the notion that upside on markets may be capped near term.”