DXY: 2-way trades likely in the interim – OCBC

US Dollar (USD) eased lower into Friday NY close. DXY was last at 97.90 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Daily momentum is mild bearish

"US data on Friday was a mixed bag – empire manufacturing came in better than expected but retail sales, industrial production, Uni of Michigan sentiment disappointed. On Fedspeaks, Daly reiterates that 2 cuts this year remains 'a good projection' and did not think an outsize cut is required at September FOMC. A 25bp cut is about 85% priced in."

"Focus shifts to Powell’s speech at Jackson Hole symposium on Friday (10pm SGT). There are expectations for him to pivot. But in the interim, caution may prevail and that may see USD trade sideways until we get clarity from Powell."

"Daily momentum is mild bearish while RSI was flat. 2-way trades likely in the interim. Resistance at 98.10/30 levels (21, 50 DMAs), 99.15 (100 DMA). Support at 97.60, 97.10 levels."