DXY: Tomorrow brings PPI data – OCBC
US CPI is upon us tonight (930pm SGT) and this should give Fed officials a final look at inflation environment ahead of next week’s FOMC. A 25bp cut is more or less a done deal for next week’s FOMC unless US CPI unexpectedly surprises a lot to the upside. DXY was last at 106.56, OCBC’s FX analyst Christopher Wong notes.
Daily momentum is mild bearish
“Headline CPI may have ticked higher partly because of the base effect but core CPI is expected to come in steady at 3.3%. For DXY, there could be room for downside should core CPI come in softer. But given FOMC, and a refreshed dot plot next week, there may also be limitations to how much lower the USD can go.”
“Daily momentum is mild bearish while RSI is flat. Head and shoulders pattern appears to have formed but DXY has yet to break below the neckline. A decisive break below neckline should see bears gather momentum.”
“Support at 105 levels (38.2% fibo retracement of Sep low to Nov high), 104.60 (50 DMA) and 104.10 (200 DMA, 50% fibo). Resistance at 106.70 (second shoulder). Tomorrow brings PPI data.”
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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.
