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DXY: Weaker NFP figures weighed on USD – OCBC

He US Dollar Index (DXY) fell last week on weaker US data and Fed comments, say OCBC FX analysts Frances Cheung and Christopher Wong.

DXY falls on Fed comments, weaker US data

“While the recent headline NFP data may have surprised to the upside at +206K vs. 190K, the figure is now moving back below the 6-month moving average of +222K. The net downward revision to payrolls over the past 2 months was also large at -111K, while the unemployment rate rose to 4.1% (vs. 4% previously). The job vacancy rate is also on the decline. Overall, labor market tightness is easing.”

“This week, we are closely watching the US CPI report (Thursday) and Fed Chair Powell’s semi-annual testimony before the Senate Banking panel (Tuesday) and the House Financial Services Committee (Wednesday). If there is no change in the tone of Powell’s recent comments and the CPI continues to post lower numbers, then the USD decline could have room to continue.”

“DXY was last seen at 104.89. Daily momentum turned bearish while RSI fell. An evening star pattern was seen on the weekly chart. Taken together, the bearish setup might have room to continue. Support is seen at 104.80 (61.8% Fib retracement of Oct high to 2024 low, 100-DMA), 104.50 (200-DMA), and 103.98 (50% Fib retracement). Resistance is seen at 105.10 (50-DMA), 105.80 (76.4% Fib retracement), and 106.20.”

Source: Fx Street

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