DXY: USD bears need momentum from data - OCBC

US Dollar (USD) fell post Powell's speech at Jackson Hole. But the decline in USD did not make fresh lows. DXY last at 98 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Mild bearish momentum on daily chart fades

"Price action reflects a sigh of relief that a Fed pivot is finally underway but at the same time, momentum was somewhat restraint as Powell stopped short of being committal - on timing and trajectory of Fed rate cuts. Nevertheless, a 25bp cut is 86% chance priced in. For USD to come off more significantly may require the blessing of softer US data print this week.

"There are also a few Fedspeaks including Williams and Waller on Tuesday and Friday, respectively. We will be keeping a lookout on whether data or Fedspeaks changes the narrative from 25bp cut to discussion of 50bp cut at Sep FOMC or whether the trajectory of cut this year increases. Softer US data or dovish tilt rhetoric in Fedspeaks should continue to weigh on USD."

"Mild bearish momentum on daily chart faded while decline in RSI moderately. 2-way trades likely in the interim. Resistance at 98.50 (21 DMA), 98.90 (100 DMA), 99.60 levels. Support at 97.60 levels."