DXY: Noise from Fedspeaks might diminish – OCBC

US Dollar (USD) continued to trade near recent highs, in response to Dec meeting expectations which had remain fluid. More data is coming in while comments from Fed officials continue to paint a divergence in opinions. DXY last seen at 100.15 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

2-way trades likely to persist

"Last Fri, Williams indicated his support for a rate cut helped to bring back probability of Dec cut to above 60%. Though Dec cut probability continues to swing, the quantum of cut from now till end-2026 remained relatively steady at around 90bps cumulative of cuts. This probably explained why the USD did not go a lot higher as only near-term expectation was affected."

"Nevertheless, noise from Fedspeaks should diminish as there is no more scheduled Fedspeaks this week while Fed communications enter a blackout starting this Sat. On data, Sep PPI, retail sales are out tomorrow. BLS announced that Aug JOLTS report will be released on 2 Dec while both Sep and Oct JOLTS report will be out on 9 Dec, just before FOMC on 11 Dec. But Nov NFP and CPI report will be out later on 16 and 18 Dec, respectively (after Dec FOMC)."

"Price action indicates indecision and also signaled some weakness in the recent USD rebound (likely in anticipation for catalyst). Mild bullish momentum on daily chart observed while RSI is near overbought conditions. 2-way trades likely to persist. Resistance at 100.6 (76.4% fibo). Support at 99.50/70 levels (21 DMA, 61.8% fibo), 99.10 (50% fibo retracement of May high to Sep low)."