The US markets were closed for a holiday, and the impact of the US Dollar Index (DXY) on Oversea-Chinese Banking Corporation Limited (OCBC) was significant. The USD fell for the second day in a row after the ISM services index fell into contraction territory. This decline was reflected in new orders and employment figures, which also dropped below 50, according to analysts Frances Cheung and Christopher Wong from OCBC.
The bearish momentum on the daily chart was evident as the DXY stood at 105.22. The Relative Strength Index (RSI) also decreased, indicating a weakening bullish trend. Key support levels were identified at 105.20 (50-day Moving Average), 104.80 (61.8% Fibonacci retracement level), and 104.50 (200-day Moving Average). On the other hand, resistance levels were noted at 105.80 (76.4% Fibonacci level) and 106.20.
The recent release of the Federal Open Market Committee (FOMC) meeting minutes reiterated the Fed’s focus on making modest progress in the face of elevated inflation. This stance was in line with comments made by Fed Chair Jerome Powell and Mary Daly regarding the Beveridge curve and the softening of the US exceptionalism narrative. Market participants were eagerly awaiting the Non-Farm Payrolls (NFP) report on Friday and the Consumer Price Index (CPI) report the following Thursday, as a weaker-than-expected print could calm USD bulls.
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In conclusion, the recent movements in the USD and the implications for OCBC highlighted the evolving market dynamics influenced by economic data and central bank policies. Investors should remain vigilant and stay informed to navigate the uncertainties associated with investing in open markets.