US Data in Focus
The US Dollar is on watch this week as traders prepare to receive a slew of US data. Following the reopening of the govt on the back of the record-long shutdown, delayed data from that period is now making its way through along with the resumption of the current data schedule. This week, traders will be watching US PPI and retail sales tomorrow, weekly jobless claims, prelim quarterly GDP, core PCE and Beige Book data on Wednesday ahead of the Thanksgiving holiday on Thursday and long weekend.
December Easing Expectations
Notably, pricing for a December cut has spiked back to above 70% today, from as low as 33% toward the end of last week. Dovish comments from Fed’s Williams on Friday seem to have fuelled the shift with the NY Fed President voicing his support for a further cut this year. Despite this shift in pricing, we’ve seen no subsequent reactive downside in USD suggesting traders are waiting to see what guidance we get from data this week.
Mixed Employment Data
Last week, the delayed September NFP came in well above forecasts at 199k vs 55k expected. However, the prior figure was revised lower to -4k from 22k and the unemployment rate was seen rising while wage growth cooled. Aside from the headline figure, the rest of the data was bearish which has likely fed into the uptick in rate cut expectations. If we see any fresh data downside this week, this should see easing prospects rising higher putting fresh pressure on USD. Alternatively, any upside surprises in data this week should see easing probabilities cooling, keeping USD supported.
Technical Views
DXY
For now, the rally in the index remains capped by the 100.39 level resistance. While above 99.15, the focus is on a continuation higher and a breakout towards 101.91 next. Below 99.15, focus turns to 98.24 next and the retest of the broken bear channel highs.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.