DXY: Bearish but oversold – OCBC
|US Dollar (USD) fell sharply. The narrative of US exceptionalism continues to fade as markets are increasingly focused on how Trump policies are hurting the US economy. Dollar Index (DXY) was last seen at 104.10 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.
Pace of decline is likely to moderate
"Overnight, Trump administration confirmed a 1-month delay for automakers from newly imposed tariffs on Mexico and Canada. USD moves so far have also somewhat mirrored the USD decline seen in 2017 post Trump 1.0."
"DXY broke below 200 DMA. Daily momentum turned bearish but RSI fell to near oversold conditions. Pace of decline is likely to moderate while we also do not rule out intra-day bounce. Resistance at 105/105.20 (50% fibo, 200 DMA), 106.35 (38.2% fibo retracement of Oct low to Jan high). Support at 104 (61.8% fibo), 103.40 and 102.50 (76.4% fibo)."
"On US data, today brings initial jobless claims before payrolls report tomorrow. Softer US data may continue to add to USD woes. Later on Fri night, Powell will give a speech at the Chicago Booth’s US monetary policy forum. There will also be a Q&A session. It may be worth keeping a look out on any touchpoints he may have on US economic outlook or Fed policy, given the recent narrative on US facing stagflation risks."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.