From TradingView · · 1m
DXY Hike Odds Drop to 77%, Is 101.20 Still a Buy?
DXY odds for December Fed hikes fell to 77% as strong jobs data weakens dollar support.
In brief
DXY odds for December Fed hikes fell to 77% as strong jobs data weakens dollar support. DXY dropped 0.39% to 101.32 after Democrats took control of Congress, with December Fed hike odds falling to 77%. Originally reported by TradingView.
DXY Drops After Congress Shift
DXY slid 0.39% to 101.32 after Democrats took control of Congress.
“DXY did not fall this week because the Fed turned soft. It fell because the market stopped pricing a political accident.”
Hike Odds Fall to 77% in Week
December Fed hike odds dropped from 83% to 77% in a week.
“Right after the Fed held at 3.75%, 4.00% on 28 October, CME FedWatch priced the odds of a December hike near 83%, 85%.”
Strong Data vs Weak Hike Pricing
ADP jobs data at 86,000 and ISM services at 54.5 contradict rising hike odds.
“Hike odds fell roughly 8 points in a week, in the same week ADP printed 86,000 private jobs against a consensus near 70,000, and ISM services held at 54.5, comfortably in expansion.”
101.20 Support Zone Tested
DXY sits near 101.30 in 101.20, 101.42 zone with weak momentum.
“The daily, DXY is sitting near 101.30, inside the 101.20, 101.42 zone that capped price on the way up and now has to work as support.”
Risk of Repricing Tightening
A close below 101.00 signals the market is repricing the end of the tightening cycle.
“A sustained daily close below 101.00 breaks the structure and tells me the market is repricing the end of the tightening cycle, not just the end of election risk.”
Friday Payrolls Decider
Friday's nonfarm payrolls at 13:30 UTC will determine if DXY stays above 101.20.
“Friday's nonfarm payrolls at 13:30 UTC is the decider, 65,000 expected against September's 29,000.”
The essence
DXY dropped 0.39% to 101.32 after Democrats took control of Congress, with December Fed hike odds falling to 77%.
