DXY: Focus next on FOMC next week – OCBC
Dollar Index (DXY) continued to go higher on better-thanexpected PPI and softer EUR, following ECB meeting. Focus next on FOMC next week. DXY was last at 107 levels, OCBC’s FX analysts Frances Cheung and Christopher Wong note.
Head and shoulders pattern have formed
“Focus next on FOMC next week. A 25bp cut is more or less a done deal (markets pricing 97% probability of a cut).”
“Bearish momentum faded while RSI rose. Head and shoulders pattern have formed but DXY has yet to break below the neckline and is now challenging the second shoulder. A decisive break below neckline is required for bears to gather momentum.”
“If not a rise in DXY back above the “head” would nullify the H&S pattern. Resistance at 107.20 (first shoulder), 108 (2024 high). Support at 106.20/50 levels (23.6% fibo, 21 DMA), 105 levels (38.2% fibo retracement of Sep low to Nov high, 50 DMA). Today brings import/export price indexes.”
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