DXY: Consolidation continues – OCBC

US Dollar (USD) eased slightly overnight, in line with sideways trading. DXY was last at 98.28, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Mild bearish momentum on daily chart

"There is little incentive to pre-position ahead of Powell’s speech at Jackson Hole. Powell's speech at Jackson Hole (10pm SGT Friday) will be closely scrutinised. He is somewhat expected to pivot but not in a decisive way. He may adopt a measured tone, acknowledging the downside risks to labour market but also inflation risk."

"This scenario should reaffirm market expectations for Sep cut and is likely to be neutral-to-slight bearish for USD. But in the event, he pushes back on making any dovish tilt, then that would be a bullish scenario for dollar."

"Mild bearish momentum on daily chart shows signs of fading while RSI was flat. 2-way trades likely in the interim. Resistance at 98.30 levels (21 DMA), 99 (100 DMA). Support at 97.60, 97.10 levels."