US Dollar rising despite softer PMI data

• US Dollar holds its ground on Monday, rising despite softer PMI data.
• Market prices in 75 bps of Fed easing by year-end.
• Fed's Goolsbee pledged for "many cuts" will be needed next year.

The US economy is showing some signs of deceleration, but there are also some signs of the economic activity holding resilient. The Fed has stated that the pace of the easing cycle will depend on the incoming data.

On Monday, Fed's Goolsbee stated that rates need to come down adding that "many more rate cuts" will be needed. On the other hand, Minneapolis Fed President Neel Kashkari stated that the Federal Reserve is still focused on data to guide its decisions while Bostic commented that the recent half-point rate cut doesn't establish a pattern for future cuts, also noting that risks to the labor market have grown.

Daily digest market movers: US Dollar stays green after PMI data

• Composite S&P PMI expanded at a slower pace of 54.4 in September, down from 54.6 in August.
• Manufacturing PMI unexpectedly declined to 47.0, while the services PMI expanded at a better-than-projected 55.4.
• Market continues to veer toward a dovish Fed, pricing in 75 bps of easing by year-end.
• Traders will keep an eye on incoming Fed comments and if incoming data would justify a 50 or 75 bps cut.
• US Dollar is likely to remain vulnerable until the market reprices Fed expectations. Incoming data will be key.

DXY technical outlook: Bulls remain weak and go nowhere

The DXY index has shown some momentum, but indicators remain in a bearish zone. The Relative Strength Index (RSI) is at 40, indicating weak buying pressure. The Moving Average Convergence Divergence (MACD) is displaying diminishing green bars, further supporting the bearish trend.

Supports are located at 100.50, 100.30 and 100.00. Resistance levels are found at 101.00, 101.30 and 101.60. The DXY index is likely to face resistance at these levels if it continues to rise. Conversely, if it falls below the support levels, it could signal further weakness.