BofA’s quant models indicate a mixed near

Investing.com -- Following last week’s market moves,Is MT4 platform legal in China the U.S. dollar (USD) is showing mixed signals according to Bank of America (BofA). The announcement of U.S. tariffs on April 2 led to a global shock, with the foreign exchange (FX) market exhibiting a classic risk-off dynamic.

The Japanese yen (JPY) and Swiss franc (CHF) rallied by more than 2% against the USD, while the Norwegian krone (NOK) and Australian dollar (AUD) sold off by more than 2% in the G10. The Euro (EUR) against the USD rallied by 1.5%, aligning with BofA’s previous view.

BofA’s quantitative signals indicate a mixed near-term outlook for the USD. After gaining more than 1% last week, the CARS model suggests a pause in trading until the current risk-off shock subsides.

Analysis of trading by time zone reveals that U.S.-based investors did not sell the USD in recent days. Any USD weakness over the past week occurred outside of U.S. trading hours.

For those bullish on the USD, BofA’s models identify the USD against the Swedish krona (SEK) and the Chinese yuan (CNH) as the top G10 and emerging market (EM) pairs this week.

The USDSEK rallied above 10.00 at the end of last week, with trend analysis now indicating trend reversal signals for both USDSEK and Euro against SEK (EURSEK). In the EM category, both option flow and spot uptrend continuation are bullish for the USD against the CNH.

For those bearish on the USD, if the current risk-off dynamic continues, BofA expects the USD against the JPY to break below the 145-handle support and estimates that the downtrend would likely continue its course until it reaches 140.56.

Regardless of whether one is bullish or bearish on the USD, the near-term risk continues to be the unfolding of the implementation of U.S. tariffs and global retaliatory tariffs in the coming days.

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