DXY: ISM services, ADP employment today – OCBC

US Dollar (USD) slipped overnight after rising the session before. DXY last at 98.29 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Daily momentum turned mild bullish

"Price action remains largely range-bound as markets are still waiting for more evidence - NFP data (Friday), PPI, BLS prelim benchmark revision to establishment survey (next Wednesday) and CPI (next Thursday), in the lead-up to next FOMC. Overnight, JOLTS openings fell to 7.18mio in Jul - lowest in 10 months and this is also below the number of unemployed workers for the first time since Apr 2021. The report also indicated layoffs rose to 1.81mio in July, from an upward revised print of 1.8mio in Jun. These add to evidence that the labour market is softening."

"Data focus for the week remaining is on ADP employment, ISM services, initial jobless claims (Thursday) and more importantly, NFP report (Friday). Consensus looks for a 75k print (below 6m average of 81k) for NFP. Much softer-than-expected data print may potentially change the rate cut narrative and weigh on USD. In particular, we will be on the lookout for any pick-up in speculation for a jumbo 50bp cut at Sep FOMC."

"Daily momentum turned mild bullish while the rise in RSI moderated. 2-way risks likely. Resistance at 98.70 (100 DMA) and 99.60 (23.6% fibo retracement of 23.6% fibo retracement of 2025 high to low). Support at 98.00/20 levels (21, 50 DMAs), 97.50 and 97.10 levels. On Fedspeaks, Williams and Goolsbee are lined up tonight before Fedspeaks go into a communication blackout on 6 September."