US Dollar steady ahead of key data, mixed JOLTS

• US bond yields rise, supported by sentiment favoring Trump in the upcoming US presidential election and cautious Fed stance on future rate cuts.
• Job openings decrease slightly in September to 7.44 million.
• US Housing Prices index from August saw an improvement.

The US Dollar Index (DXY), which measures the value of the USD against a basket of six currencies, extends gains on Tuesday, hitting a three-month high at 104.55. Despite a slight dip in September JOLTS Job Openings, the US labor market remains robust, as indicated by steady hiring and separation rates.

Key economic data releases, including ISM Manufacturing PMI and Nonfarm Payrolls (NFP), are expected this week. The outcome of these releases will be crucial in determining the index's trajectory. The USD remains supported by a resilient economy, but headwinds include Fed caution on inflation and market expectations for rate cuts.

Daily digest market movers: US Dollar rises despite mixed labor data, Trumps odds also help

• The US Dollar (USD) strengthens as positive economic data from last week suggests ongoing resilience in the US economy.
• The CME FedWatch Tool indicates a 95.8% probability of a 25-basis-point rate cut in November, with no anticipation of a larger 50-basis-point reduction. The odds of a cut in December also remain high.
• The US Dollar receives support amid higher US bond yields, driven by market sentiment increasingly favoring Former President Donald Trump in the upcoming US presidential election.
• On the data front, the number of job openings on the last business day of September stood at 7.44 million, below the market expectation of 7.99 million.
• On the positive side, hires and total separations remained stable, while quits and layoffs showed minimal changes.

DXY technical outlook: DXY surges, faces resistance from overbought conditions

The DXY index remains above its 200-day SMA, but the rally faces resistance as overbought conditions emerged. The index is now expected to consolidate, potentially correcting its overbought status. Indicators such as the Relative Strength Index (RSI) remained near overbought levels. Technically, the index cleared gains that had pushed it to a high of around 104.60, which gives further evidence of buying momentum losing steam. Support levels lie at 104.50, 104.30 and 104.00, while resistance levels are located at 104.70, 104.90 and 105.00.