The US Dollar (USD) retreated overnight, likely due to profit-taking on MTD gains. The Dollar Index (DXY) was last at 104 levels, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
“Daily momentum remains bullish while RSI shows signs of easing from near overbought conditions. Bearish engulfing observed for yesterday session – may hint at bearish pressure intra-day. Support at 103.80 (200 DMA), 103.20 (100 DMA), 102.90 (21 DMA). Resistance at 104.60 (61.8% fibo retracement of 2023 high to 2024 low). Between now and then, we should see 2- way trades in USD.”
“Data focus today on durable goods report and university of Michigan sentiment index. Next week shall mark the start of a busy, eventful 2 weeks with JOLTS job openings, consumer sentiment (29 October); ADP employment (30 October); core PCE (31 October) and NFP (1 November) before US elections (5 November) and FOMC (7 November).”
“Top side looks stretched technically while any pullback may also be shallow as interests to buy USD (proxy for Trump hedges) may return ahead of US elections. Defensive positioning/ trump hedges may still gather traction in the near term given the fluidity of election developments and geopolitical uncertainties. Traditional polls remain too close to call while prediction market pointed to Trump lead. The high degree of uncertainty (also seen in 2w vols, which covers US elections) basically means that markets will largely be driven by election-related headlines.”
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