DXY: 2-way near-term risks persist – OCBC
30.09.2024, 10:07

DXY: 2-way near-term risks persist – OCBC

The US Dollar (USD) traded with a heavy bias this morning as core PCE data came in softer while recent Fedspeaks were mostly dovish. DXY was last at 100.29, OCBC FX strategists Frances Cheung and Christopher Wong note.

Daily momentum is flat

“Musalem said he sees more than one additional 25bp cut for rest of 2024. He also said that a faster pace of rate reduction might be appropriate if economy and labour market weaken more than he expects. As of this morning, 30d Fed fund futures still implied 75bp cut for rest of 2024, despite Fed guiding for 50bp cut.”

“This week’s JOLTS job openings (Tue), initial jobless claims (Thu) and payrolls report (Fri) will be of interest. Dovish bets may be reduced if labour-related data comes in hotter, and this may have rebound impact on USD in the near term. Elsewhere, Fedspeaks will also be watched. About 13 officials are scheduled to speak this week, of which Fed Chair Powell’s speech at NABE tonight will the highlight.”

“Daily momentum is flat while RSI fell. Risks are somewhat skewed to the downside. Near term support at 100.20 (recent low). Break-out puts next support at 99.60, 99.20 levels. Resistance at 101.10 (21 DMA), 101.90 levels.”

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