BofA says USD rally needs fresh catalyst as quant signals turn more balanced; remains tactically bullish fundamentally

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BofA says USD rally needs fresh catalyst as quant signals turn more balanced; remains tactically bullish fundamentally

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  • The bank says that the post-June FOMC USD rally has stalled after softer US labour data, with quant signals suggesting vulnerability to a near-term reversal
  • It cites option flow and skew, which have both shifted towards USD puts; additionally, its technical matrix shows several bearish reversal signals across major USD crosses, it's analysts write
  • BofA says it remains tactically bullish USD fundamentally, but says GBPCHF looks attractive, supported by carry, GBP-positive flow/skew signals, bullish technicals and SNB resistance to CHF strength.

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