DXY: Bullish run capped – OCBC
|US Dollar (USD) slipped further overnight, in line with our earlier technical caution – that we were monitoring for signs that the USD rebound has turned its course. Indeed, the runup failed to break above 200dma and turned lower. Last at 99.80 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.
USD to trade moderately softer amid Fed cuts underway
"Bullish momentum on daily chart faded while RSI fell. Support here at 99.80 (61.8% fibo), 99.10 levels (50% fibo retracement of May high to Sep low), 98.40 (38.2% fibo, 50 DMA). Resistance at 100.30/60 levels (200 DMA, 76.4% fibo). While absence of data and a non-committal, divisive Fed had allowed for USD squeeze to play out earlier this week, we had also said that at some point, USD bears can return with more conviction but that would require US data to come in softer (when data gets released), alongside Fed easing rates more decisively."
"Private sector data continued to reinforce the view that US labor market is softening – not only are job creations slowing, but layoffs are also beginning to increase. A report by Challenger, Gray & Christmas overnight saw job cuts surged 183% from Sep to 153k. YTD, companies have announced 1.1mio job cuts, the highest since Covid in 2020."
"In another set of jobs-related data, Indeed job postings and Indeed wage growth tracker have also been falling all year. Overall, we continue to expect USD to trade moderately softer amid Fed cuts underway while US data stays soft. USD has room to fall as long as broader risk-on sentiment stays intact and growth conditions outside US remains supported. Meanwhile, US government remains shut for 36 days – entering its longest stretch yet."
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.