US Greenback (USD) rebounded as markets grapple a difficult setting of upper oil costs and falling equities amid ongoing geopolitical uncertainties. DXY was final at 98.64, OCBC’s FX analysts Frances Cheung and Christopher Wong notice.
Gentle bearish momentum on each day chart has pale
“In the meantime, a line-up of key central financial institution selections this week, together with FOMC tonight (2am SGT) must also see additional adjustment in positions. Earlier than the FOMC resolution, a number of key U.S. financial indicators shall be launched, together with constructing permits and housing begins. Moreover, preliminary jobless claims and persevering with claims information have been moved as much as tonight because of the closure of U.S. markets tomorrow in observance of the Juneteenth vacation.”
“Whereas FOMC is anticipated to maintain coverage fee establishment, focus is on the dot plot and press convention. Markets anticipate dot plot to nonetheless level to 2 cuts by year-end. If the Fed indicators just one lower or pushes again on easing expectations, the USD might strengthen additional. Alternatively, a extra dovish tone might result in USD promoting. Elsewhere, oil costs might proceed to rise if geopolitical tensions escalate. This will likely dampen the momentum in AxJs. Web oil importing AxJs comparable to INR, KRW, TWD and THB perhaps be affected greater than different AxJs.”
Nonetheless, geopolitical improvement stays fluid and requires additional monitoring. De-escalation would seemingly weigh on the greenback and produce assist again to danger proxies but when tensions worsen, high-beta FX comparable to AUD and NZD might commerce on the again foot. Gentle bearish momentum on each day chart pale whereas rise in RSI reveals indicators of moderation. Resistance at 99 ranges (21 DMA), 99.60 ranges (50 DMA). Assist at 98, 97.60 (latest low).
