Major Trend line resistance- 99.60 (major trend joining 95.15 and 96.98)
US dollar index is trading lower for 4th trading days and lost nearly 100 pips on weak US data. The economic data released this week for the US came much weaker than expected especially ISM manufacturing PMI, which came at the lowest level since 2009. Markets eye US NFP data for further direction.US 10-year yield continues to trade lower and lost more than 14%. The spread has widened sharply by 12 bps from 2 bps.
According to the CME Fed watch tool, the chance of keeping rates unchanged declined to 12.7% from 50.8% 1-week ago and the probability of 25 bps cut jumped to 87% from 49.2%.
The near term resistance is around 99.20 and any break above targets 199.60/100/100.30.
On the flip side, near term support is around 98.60 and any break below will drag the DXY to level 98.40/98. Major weakness only below 98 levels.
It is good to sell on rallies around 98.95-99 with SL around 99.2 for the TP of 98.20.
