DXY: Softer NFP to weigh on USD – OCBC

FXStreet Insights Team FXStreet

The Dollar Index (DXY) fell last week on softer US data and Fedspeaks, OCBC FX analysts Frances Cheung and Christopher Wong note.

DXY falls on Fedspeaks and softer US data

“While recent headline NFP may have surprised to the upside at +206k vs 190k, the print is now dipping back below the 6month moving average of +222k. 2month payroll downward net revision was also large at -111k while unemployment rate rose to 4.1% (vs. 4% prior). Job vacancy rate is also on a decline. On net, tightness in labour market is easing.”

“This week, we are keeping a close watch on US CPI report (Thu) and Fed Chair Powell’s semi-annual testimony to Banking senate panel (Tue) and House Financial Services Committee (Wed). If there is no change in tune to Powell’s recent remarks and CPI continues to print softer, then the USD slippage may have room to run.”

“DXY was last seen at Last seen at 104.89. Daily momentum turned bearish while RSI fell. Evening star pattern observed on weekly chart. On net, the bearish setup may have room to run. Support at 104.80 (61.8% fibo retracement of Oct high to 2024 low, 100 DMA), 104.50 (200 DMA) and 103.98 (50% fibo). Resistance at 105.10 (50 DMA), 105.80 (76.4% fibo) and 106.20.”

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.

AUD/USD hits nine-week lows below 0.7000 on RBA Bullock's remarks

AUD/USD reverses a brief uptick and turns lower to hit nine-week lows below 0.7000 in the European morning on Tuesday, as traders digest cautious remarks from Reserve Bank of Australia (RBA) Governor Michele Bullock during the press conference. Earlier on, the RBA raised the cash rate to 4.60%, as widely expected, leaving the door open to further rate hikes if needed.

USD/JPY consolidates near 157.50 as a bullish USD counters intervention risks

USD/JPY struggles to capitalize on the overnight bounce from a one-week low, consolidating around 157.50 in the Asian session on Tuesday. Trump's concerns about the Japanese Yen's weakness fueled speculation about another US-Japan joint intervention. This, along with the hawkish BoJ, underpins the JPY and caps the currency pair. Meanwhile, rising Fed rate-hike bets and oil-driven inflation fears continue to push US bond yields to multi-year highs, keeping the US Dollar pinned near a two-month high and supporting the pair.

Gold seems vulnerable near eight-week low amid Fed hike bets

Gold struggles to capitalize on a modest Asian session uptick, trading near its lowest level since August 4, around the $4,100 neighborhood, touched the previous day. Moreover, the bearish fundamental backdrop suggests that the path of least resistance for the precious metal remains to the downside.

Ripple and Stellar face resistance amid weak signals

Ripple and Stellar remain under pressure as bulls struggle to sustain recent gains. XRP extends its decline below $1.480 after three consecutive losing days, while XLM faces rejection near the $0.234 resistance zone. In addition, mixed derivatives outlook and weakening on-chain metrics suggest that bullish momentum remains fragile, leaving both XRP and XLM vulnerable to further losses.

India Gold market cautiously optimistic with approach of festive and wedding seasons

The Indian gold market is cautiously optimistic as we approach the festive gold-buying season. Higher prices continue to weigh on gold jewelry demand even as they support investment purchases. Meanwhile, wedding buying appears “resilient,” according to the World Gold Council.

Fed vs BoJ: Both hiked. The market only believes one of them – and the chart shows which

The Fed and the BoJ have just done something remarkably similar. Both central banks raised interest rates by 25 bps last week, both are confronting inflation risks, and both signal that future decisions will depend on incoming economic data.