DXY: Mixed on the day – OCBC

FXStreet Insights Team FXStreet

Dollar Index (DXY) dipped, alongside the decline in UST yields post-FOMC. DXY was last at 103.72 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

USD may enter into a mixed play

"Bearish momentum on daily chart is fading while RSI shows signs of rising from near oversold conditions. Mild rebound risk is not ruled out. Resistance at 104 (61.8% fibo retracement of Oct low to Jan high), 105 levels (50% fibo, 21, 200 DMAs). Support at 103.10, 102.50 levels (76.4% fibo)."

"Risk of broadening tariff war may potentially weigh on global growth, trade, undermine market sentiments and drag on Asian FX, especially ahead of 2 Apr reciprocal tariff risk. The likes of KRW, JPY and IDR may be undermined in the near term. In addition, there were some concerns of EM contagion risks after Turkish Lira and Colombian Pesos saw a sharp sell-off at one point yesterday, driven by idiosyncratic (domestic) factors."

"Tariff war and EM contagion fears can bring back memories of the 2018 EM sell-off. This risk reinforces our view that USD may enter into a mixed play – USD gains to be more pronounced vs. selected EM Asian FX and high- beta majors like AUD and NZD while USD may stay sideways or modestly softer vs. G3 majors."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD holds lower ground near 1.1850 ahead of EU/ US data

EUR/USD remains in the negative territory for the fourth successive session, trading around 1.1850 in European trading on Friday. A broadly cautious market environment paired with modest US Dollar demand undermines the pair ahead of the Eurozone GDP second estimate and the critical US CPI data.

GBP/USD keeps losses around 1.3600, awaits US CPI for fresh impetus

GBP/USD holds moderate losses at around 1.3600 in the European session on Friday, though it lacks bearish conviction. The US Dollar remains supported amid softer risk tone and ahead of the US consumer inflation figures due later in the NA session on Friday.

Gold trims intraday gains to $5,000 as US inflation data loom

Gold retreats from the vicinity of the $5,000 psychological mark, though sticks to its modest intraday gains heading into the European session. Traders now look forward to the release of the US consumer inflation figures for more cues about the Fed policy path. The outlook will play a key role in influencing the near-term US Dollar price dynamics and provide some meaningful impetus to the non-yielding bullion.

US CPI data set to show modest inflation cooling as markets price in a more hawkish Fed

The US Bureau of Labor Statistics will publish January’s Consumer Price Index data on Friday, delayed by the brief and partial United States government shutdown. The report is expected to show that inflationary pressures eased modestly but also remained above the Federal Reserve’s 2% target.

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

Solana Price Forecast: Mixed market sentiment caps recovery

Solana (SOL) is trading at $79 as of Friday, following a correction of over 9% so far this week. On-chain and derivatives data indicates mixed sentiment among traders, further limiting the chances of a price recovery.