DXY: Break below 100-DMA may open room for further downside – OCBC
21.02.2025, 10:16

DXY: Break below 100-DMA may open room for further downside – OCBC

US Dollar (USD) fell overnight as UST yields retreated while US equities slipped. US Treasury Secretary Bessent told Bloomberg TV in an interview that any move to boost the share of longer-term treasuries in government debt issuance is some ways off, given elevated inflation and Fed’s QT. DXY was last seen at 106.68, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Daily momentum is bearish

"On Fedspeaks, Bostic said that he expects that Fed will lower rates twice in 2025 though uncertainty around that projection has risen. Earlier during Asia time yesterday, Trump’s remark that a 'new trade deal with China is possible' also weighed on USD/AxJs. Elsewhere, US exceptionalism (US equities over MSCI world) has been easing, albeit from elevated levels amidst chatters of rotation into Chinese equities."

"Fading US exceptionalism can weigh on USD, especially if the rest of the world still holds up. Daily momentum is bearish while RSI is near oversold conditions. Key support here at 106.30/40 levels (100 DMA, 38.2% fibo retracement of Oct low to Jan high). Decisive break here may open room for further downside towards 105.50, 105.20 levels (50% fibo). Resistance at 107, 107.50/80 levels (23.6% fibo, 21 DMA) and 108 (50 DMA)."

"Day ahead to watch prelim PMIs, Uni of Michigan sentiment and existing home sales. Weaker print can weigh on USD."

 

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