US Dollar: Post-FOMC consolidation and data focus – OCBC

OCBC strategist Christopher Wong observes that the US Dollar (USD) has eased modestly as UST yields and Oil retraced from their post-FOMC spikes. He sees the move as consolidation, with further USD gains likely needing another leg higher in UST yields. Upcoming US data on activity, labour markets and inflation could trigger unwinding of rate expectations and reopen downside in the Dollar.

Higher Fed path versus data risks

"USD eased modestly overnight as UST yields partially retraced lower from its post-FOMC spike while oil pulled back. For now, this looks more like consolidation as markets digest post-FOMC reaction."

"The Fed’s higher rate path may be supportive for the USD, but with a fair amount of hawkish expectation already priced, further gains in USD may need another leg higher in UST yields. Attention should increasingly shift back to the data."

"DXY last at 100.2 levels. Daily momentum is bullish though RSI showed tentative signs of turning lower from near overbought conditions."

"Resistance at 100.32 (23.6% fibo retracement of 2026 low to high), 100.60. Support at 100/99.80 levels (50, 100 DMAs), 99.4 (38.2% fibo) and 99.2 levels (21, 200 DMAs)."

"Any moderation in activity, labour-market conditions or inflation could prompt some unwinding of rate expectations and reopen downside in the USD."