Noor Trends News, Technical Analysis, Educational Tools and Recommendations
The US Dollar remained steady ahead of key economic data releases, despite receiving mixed signals from the Job Openings and Labour Turnover Survey (JOLTS). US bond yields saw an uptick, supported by market sentiment leaning towards former President Donald Trump in the upcoming presidential election and a cautious stance from the Federal Reserve regarding future rate cuts.
Labour Market and Housing Updates
September saw a slight decrease in job openings to 7.44 million, falling below market expectations of 7.99 million. Despite this, the US labour market remained robust, evidenced by steady hiring and separation rates. Moreover, the US Housing Prices Index from August showed an improvement, indicating resilience in the housing market.
Performance of the US Dollar Index
The US Dollar Index (DXY), which measures the USD against a basket of six currencies, extended its gains on Tuesday, reaching a three-month high of 104.55. Although the September JOLTS Job Openings showed a slight dip, the resilience of the US economy continued to support the USD. This week’s key economic data releases, including ISM Manufacturing PMI and Nonfarm Payrolls (NFP), will be crucial in determining the index’s trajectory. Nevertheless, caution from the Federal Reserve regarding inflation and market expectations for rate cuts present potential headwinds.
Market Dynamics and Sentiment
The US Dollar strengthened as positive economic data from the previous week suggested 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 rate cut in December also remain high. The USD received further support from higher US bond yields, driven by market sentiment increasingly favoring former President Donald Trump in the upcoming presidential election.
Job Openings, Labour Data Insights
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. Positively, hires and total separations remained stable, with minimal changes in quits and layoffs.
Technical Outlook for DXY
The DXY index remains above its 200-day Simple Moving Average (SMA), though the rally faces resistance from overbought conditions. The index is expected to consolidate and potentially correct its overbought status. Indicators like the Relative Strength Index (RSI) remain near overbought levels. Technically, the index’s recent gains pushing it to around 104.60 suggest buying momentum may be losing steam. Support levels are at 104.50, 104.30, and 104.00, while resistance levels are at 104.70, 104.90, and 105.00.
