USD looks vulnerable to further near term weakness - Westpac

Research Team at Westpac, suggests that the USD looks vulnerable to further near term weakness, as marquee releases such as payrolls and both the manufacturing and services ISM reports had missed the expectations.

Key Quotes

“Our surprise index remains a considerable distance from extreme levels where it typically bottoms out. Sep 21 FOMC hike odds have eased back to 24% but can leak lower still in to the FOMC fuelling yet more USD weakness.

Technical: Deeper than anticipated slippage risks retesting 94.75 (mid-range since 1Q’15). Risk of deeper pullbacks remains, but the profile of neutral momentum and longer term patterns suggest buying into further weakness for range defining rebounds.”