DXY: US markets closed for holiday – OCBC

FXStreet Insights Team FXStreet

US Dollar (USD) fell for a second consecutive session after ISM services slumped into contractionary territory. New orders, employment also surprised, falling into contraction zone (below 50), OCBC analysts Frances Cheung and Christopher Wong note.

Bullish momentum fades on the daily chart

“Echoing Federal Reserve (Fed) Chair Jerome Powell’s recent remarks in Sintra that Fed has made ‘quite a bit of progress’ toward cooler inflation, the FOMC minutes released overnight emphasized on ‘modest further progress’ in recent months though inflation remained elevated.”

“This is consistent with recent comments made by Fed Chair Powell and Mary Daly, who spoke about this Beveridge curve. On the data metrics, US exceptionalism narrative has been softening. And markets would be looking forward to Friday’s NFP or even next Thu’s CPI report. A softer print should help to sedate USD bulls.”

“DXY was last at 105.22. Bullish momentum on daily chart faded while RSI fell. Support here at 105.20 (50 DMA), 104.80 (61.8% fibo retracement of Oct high to 2024 low, 100 DMA) and 104.50 (200 DMA). Resistance at 105.80 (76.4% fibo), 106.20.”

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FXStreet Insights Team

FXStreet

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