USD Stabilises
The US Dollar is looking more stable today following a fresh push lower yesterday. Thinned markets due to the Thanksgiving holiday in the US should prevent a fresh decline today. Yesterday saw some better-than-forecast US data with weekly jobless claims coming in below forecasts and durable goods coming in above estimates. Despite the data, easing expectations for December remain entrenched with the CME group pricing a cut at around 85% currently, this is up sharply from the less than 40% we saw at the start of last week. During that shift in sentiment, USD has corrected lower with the DXY falling back from the month’s highs.
Bearish Risks Ahead
While we’ll likely see USD remain stable for now sue to lower participation, the return of US traders on Monday should see the selling resume as desks look ahead to the upcoming FOMC meeting. Indeed, the DXY is on track for its largest losing week in four months, a clear sign of the shift in sentiment we’ve seen. Looking ahead, focus next week will be on a slew of incoming US data ( ISM, employment costs, ADP, core PCE and UoM data) as well as Fed’s Powell who speaks on Tuesday. Any further data weakness and/or dovish commentary from Powell should see USD accelerating to the downside.
Technical Views
DXY
The rally in DXY has stalled for now into a fresh test of the 100.36 level. Risks of a double top are now seen with 99.15 the support level to watch. If broken, this should open the way for heavier selling down towards the 98.24 level and a retest of the broken bear channel.
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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.