DXY: Hopes of US government reopening – OCBC

FXStreet Insights Team FXStreet

US Dollar (USD) traded mixed this morning, with gains seen vs. low yielding major FX while losses were seen vs. risk-proxy FX, including AUD, KRW. DXY was last at 99.55 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

2-way trades likely to persist

"US equity futures are also trading modestly firmer. The moves reflected some hopes of a reopening of the US government. A group of moderate Senate Democrats agreed to support a deal to reopen the government. Under the agreement, Congress would pass full-year funding for the departments of Agriculture, Veterans Affairs and Congress itself, while funding other agencies through Jan. 30."

"A procedural test vote is expected to be held soon today. If that vote succeeds, the Senate will need the consent of all members to end the shutdown. The House would next need to pass the bill and have it sent to Trump to sign in order for the government to reopen – a process that may take several days."

"Mild bullish momentum on daily chart intact while RSI fell. 2-way trades likely to persist. Resistance at 100.30/60 levels (200 DMA, 76.4% fibo), 101.20 levels. Support at 99.10 levels (50% fibo retracement of May high to Sep low), and 98.20/40 levels (50, 100 DMAs, 38.2% fibo). CPI, PPI and retail sales data are supposed to be released towards Thursday, Friday but is likely to be delayed until further notice."

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FXStreet Insights Team

FXStreet

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