DXY: Watching if interim bottom holds – OCBC
|USD’s decline continued after US conference board consumer confidence unexpectedly fell. DXY was last at 100.49, OCBC’s FX strategists Frances Cheung and Christopher Wong note.
Decisive break below 100.20 puts 99.60, 99.10 in focus
“Elsewhere, markets were riding on risk-on mood after China unleashed a slew of support measures. Sharp gains in RMB not only fuelled momentum in AXJs but also spurred gains in DM FX, including AUD, EUR.”
“Daily momentum is flat while RSI fell. Interim double-bottom appears to be forming – we continue to watch price action. Resistance at 101.10 (21 DMA), 101.90. Support at 100.20levels (interim double bottom). Decisive break puts 99.60, 99.10 levels in focus. This week, we watch initial jobless gains (Thu), core PCE (Fri).”
“Should core PCE unexpectedly rebound, then worries of second-round inflation may play up and USD may bounce. Apart from Fedspeaks, there is a slew of Fed officials speaking this week, including Powell’s pre-recorded speech on Thu.”
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