DXY Sees Mild Bullish Momentum Amid Wage Growth Concerns
The US Dollar Index (DXY) has shown mild bullish momentum after stronger-than-expected jobs data, but further gains are capped by expectations of moderate Federal Reserve repricing.
According to OCBC's Christopher Wong, the payrolls report initially lifted the USD and DXY, but softer wage growth and only modest Fed repricing limited gains. He notes that the resilient US labour market keeps the risk of further Fed tightening alive, which may restrain USD downside before the Consumer Price Index (CPI) release.
The technicals show DXY holding mild bullish momentum with clear resistance and support levels, including 99.40 and 98.60/70. Focus shifts to this week's CPI, where an upside surprise could provide the catalyst for renewed USD strength, while a softer print would likely keep price action more two-way.
The implied probability of a September Fed hike briefly rose to around 65% from 55%, but subsequently eased towards 62%. DXY last traded at 99.20 levels, with mild bullish momentum intact on the daily chart while RSI is flat.