DXY’s Next Support Level: 99.50, a Short-Term Pullback Target
The DXY Index reached a high of 100.72 on Friday, close to the December low of 100.62, but above the July 2023 low of 99.58 due to expectations of a Fed cut.
Remaining above the July 2023 low of 99.50
“At Jackson Hole, Fed Chair Jerome Powell declared that it is time to modify monetary policy. Powell stated that the Fed had plenty of room to react to any concerns in this situation and was clear about the Fed’s shift from containing inflation from its peak to averting a further contraction in the labour market.
“Short-term surprises in this week’s US data, particularly the PCE deflator on August 30, might lead the oversold DXY to stabilise, delaying the futures market’s bet on a 50 basis point decrease. We will evaluate the DXY’s chances of trading below 100 in the medium run, though. On September 6, the US monthly jobs data will be crucial.
“The Fed will make major changes to the Summary of Economic Projections, aside from the anticipated rate cut in September. The Federal Reserve forecast 1-2 rate cuts in 2H24 and 200 basis points of reduction during 2025–2026 in June.
