DXY opens slightly lower – continuing recent weakness; short-term target 79.39

FXstreet.com (Barcelona) - The DXY is likely to continue to face headwinds as the Fed keeps its foot on the gas pedal in the US. Data this week in the US will solidify or negate this thesis.

DXY to be influenced by backlog of US data this week

Here is the schedule of data releases in the US this week:

• Monday – Conference Board Leading Indicators; Existing Home Sales
• Tuesday – September Employment Report;
• Wednesday – Monthly Mortgage Apps; Export Price Index; Housing Price Index
• Thursday – Weekly Jobless Claims; Manufacturing PMI; New Home Sales
• Friday – Durable Goods; University of Michigan Consumer Sentiment Survey

The aggregation of these data will have to come in very bullish for the US economy for the Federal Reserve leadership to assume a more hawkish stance. Unless and until this happens, the DXY should remain in a bearish overall posture.

Technical outlook for DXY

Technicians say the DXY appears to be in wave “v” lower of a larger sub-wave lower. The target for wave “v” appears to be around 79.39. At that point, under normal circumstances, we would likely see a bounce in DXY – perhaps as much as a full retracement of the decline that began on 10/16 at 80.75 (intraday high). First resistance, though, comes in at the 10/17 high at 79.76.