DXY: 2-way trades on the daily chart - OCBC

There are still no Federal data releases due to US government shutdown. This puts emphasis on private sector data and Fedspeaks. DXY last seen at 98.43 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

USD should remain on a moderately soft path

"This week, there is a handful of Fedspeaks including Miran (Tuesday), Powell (Thursday). On Fedspeaks last week, Miran again pressed for aggressive rate cut trajectory, citing the impact of Trump administration's economic policies. Last Friday, ISM services came in softer than expected. Business activity, new orders all fell while employment component remains in contractionary territory. Last week's ADP private payroll also suggested that labour market continued to cool."

"JOLTS report revealed there are more unemployed people than there are job vacancies. These data reinforce the bias for Fed to continue cutting rates. In addition, a senior White House official said that the Trump administration will likely start mass layoffs of federal workers if Trump decides negotiations with congressional Democrats to end a partial government shutdown are 'absolutely going nowhere"

"Fed's easing bias, alongside weak labour market and political stand-off suggest that USD should remain on a moderately soft path. Mild bullish momentum on daily chart intact while RSI rose. 2-way trades likely. Resistance at 98.00/40 levels (50, 100 DMAs, 38.2% fibo retracement of May high to Sep low) and 99 levels (50% fibo). Support at 97.60 (21 DMA, 23.6% fibo), 97.20. There is no scheduled data release for today."