DXY Index: Powell provides support for USD bulls. The 100.20/30 resistance is still intact, after the market quickly rejected a test on 5 Nov. The headlines of the US government reopening have not translated to a USD-positive impetus, with the market perhaps worried that the delayed US data releases will enter weaker-than-expected after the prolonged shutdown. This outcome will again put the Dec rate cut on the table. Odds of a rate cut in Dec have already crept higher again, weighing on the USD somewhat. Nevertheless, the dominant view is that USD longs are just taking profit off the table, and not flipping into outright shorts. From a DXY Index perspective, so long as the recent dip is arrested above 98.50, it will strengthen the uptrend since Sep.  
 
AUD-USD: Buy on dips. The RBA faces price pressures that may stay sticky above its 2-3% target. The domestic labour market is expected to stay healthy in the upcoming quarters. Overall, Australian data points to solid underlying momentum. The RBA’s Hauser emphasized limited spare capacity and strong capacity utilisation in his 10 Nov speech. In that context, the market no longer expects any rate cuts through 2026. In contrast, even after the recent readjustment, more than three Fed rate cuts are still expected till end-2026. Thus, the RBA-Fed policy differential is now a clear AUD-supportive theme. Overall, we expect the 0.6400 – 0.6450 zone to be well-supported. The upward sloping 200-DMA at 0.6455 also strengthens that support. Prefer buy dips, targeting 0.6600 and above.    
 
USD-JPY: Supported. The summary of the Oct BOJ decision (released on 10 Nov) suggests that the board is increasingly open to another 25 bps rate hike, with opinions on timing split between the Dec and Jan BOJ meetings. However, these hawkish BOJ leanings have not translated to a firmer JPY. FM Katayama has escalated her interventionist language over the past 2 weeks, but the impact is at best temporary. Overall, the risk of actual BOJ intervention around 155.00 is thought to be still low, given that the pace of USD-JPY upside is still orderly, and JPY vols remain subdued. Overall bias is to buy USD-JPY on dips towards 150.50 – 151.00, targeting 155.00 – 156.00 levels.  

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