DXY: Softer on the day for now – OCBC
US Dollar (USD) continued to drift lower on dovish remarks from Fed officials, surprise turn lower in Philadelphia business outlook, extended US government shutdown, falling UST yields and the negative sentiments on some US regional banks over exposure to auto bankruptcy. DXY last at 98.25 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.
Downside risks likely to continue in the interim
"On Fedspeaks, Waller said he supports another 25bp cut at the Oct FOMC but rate outlook after October depends on labour market. Miran reiterated that recent trade tensions have increased uncertainty in the outlook for growth, making it more important for policymakers to lower interest rates quickly."
"Elsewhere, EUR’s rebound owing to relief that the French PM survived both no confidence votes yesterday as well as the fading of Takaichi trade (JPY recovery) also contributed to USD softness."
"Bullish momentum on daily chart faded while RSI fell. Downside risks likely to continue in the interim. Support at 98 (21, 50 DMAs), 97.50 levels. Immediate resistance at 98.40 (38.2% fibo), 99.10 levels (50% fibo retracement of May high to Sep low) and 99.80 (61.8% fibo)."
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FXStreet Insights Team
FXStreet
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