DXY: Consolidation likely with risks skewed to the downside – OCBC

US Dollar (USD) continued to trade near recent lows as ADP employment underwhelmed. DXY last seen at 97.57, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Fedspeaks may also be another source of information

"Mild bullish momentum on daily chart shows signs of it fading while RSI fell. Consolidation likely with risks somewhat skewed to the downside. But watch support at 97.60 (21 DMA, 23.6% fibo), 97.20. Break out of key support puts next support at 96.20 levels (recent low). Resistance at 98.00/40 levels (50, 100 DMAs, 38.2% fibo retracement of May high to Sep low) and 99 levels (50% fibo)."

"With US government in shutdown since 1 Oct, most Federal data will be postponed at least till government reopens. As per BLS, the payrolls data (scheduled for Fri) is likely not going to be released. The COT CFTC positioning data is likely to be delayed as well and if the shutdown lasts longer, US retail sales and CPI data releases in the week after next will likely be affected. Nevertheless, private and Fed survey data will still be available (such as ISM survey, Uni of Michigan dataset, empire manufacturing, etc.) for markets and Fed policymakers to digest."

"Fedspeaks may also be another source of information for markets to rely on. We have Logan tonight; Goolsbee early tomorrow morning; and then Williams, Jefferson for the rest of the week. The duration of the shutdown can vary and the impact on asset classes are not entirely uniform. The last shutdown in 2018 crossing over to 2019 (during Trump presidency 1.0) was one of the longest (over 30days) in modern history. And during that period, gold was up nearly 4%."