DXY: Short-term two-way risks persist – OCBC

He US dollar (USD) traded with a bearish bias this morning, as data from the PCE underlying were softer while the Fed’s recent speeches were mostly dovish. DXY was last at 100.29, FX strategists at OCBC Frances Cheung and Christopher Wong.

Daily momentum is flat

“Musalem said he sees more than an additional 25 bp cut for the rest of 2024. He also said a faster pace of rate cuts could be appropriate if the economy and labor market weaken more than he expects. Until this “Tomorrow, 30-day Fed funds futures still implied a 75bp cut for the remainder of 2024, despite the Fed’s guidance for a 50bp cut.”

“This week’s JOLTS job postings (Tuesday), initial jobless claims (Thursday), and payrolls report (Friday) will be of interest. Moderate bets may be reduced if employment-related data is higher, and This may have a rebound impact on the USD in the short term. Elsewhere, Fed speeches will also be followed. Around 13 officials are scheduled to speak this week, including Fed Chairman Powell’s speech. , at NABE tonight will be the highlight.”

“Daily momentum is flat while RSI fell. Risks are somewhat skewed to the downside. Short-term support at 100.20 (recent low). Breakout puts next support at 99.60, 99.20 levels. Resistance at 101.10 (DMA of 21), levels of 101.90.”

Source: Fx Street

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