The USD has retreated modestly so far today. Economists at Scotiabank analyze Greenback’s outlook.

USD exposed to data disappointments

The recent surge in the DXY looks ripe for some sort of correction or consolidation at least. The rally has notched up eleven consecutive weeks of gains, which looks excessive in terms of one-way moment. 

DXY price action so far this week is showing some signs of technical softness around major retracement resistance (50% Fibonacci from the 2022/2023 DXY decline). 

There’s some event risk ahead; on the data front, we get ADP jobs, Services and Composite PMIs, Services ISM and Factory Orders from the US. The yield-driven jump in the USD may leave it exposed to data disappointments