US DATA: South Region Behind Latest Moderation In Rent Inflation

• RES 4: 1.3889 1.00 proj of the Nov 4 - Jan 6 - Jan 19 price swing     
• RES 3: 1.3868 High Jan 27 and the bull trigger
• RES 2: 1.3733/3814 High Feb 4 / high Jan 30  
• RES 1: 1.3688 High Feb 09
• PRICE: 1.3686 @ 16:12 GMT Feb 09
• SUP 1: 1.3509 Low Feb 6
• SUP 2: 1.3500 50-day EMA
• SUP 3: 1.3458 76.4% retracement of the Jan 19 - 27 upleg 
• SUP 4: 1.3402 Low Jan 22  

Price rallied well Monday, adding to the bounce off last week’s lows. This may signal the end of the bearish corrective cycle posted off the YTD highs and is infitting with the trend in moving averages, which continues to point higher for now. Markets need to confirm a close back above layered support between 1.3733-1.3814, which would help open the bull trigger of 1.3868. The next key support to watch remains the 50-day EMA, at 1.3495. 

• US Data/Speaker Calendar (prior, estimate). All times ET
• 02/10 6:00 NFIB Small Business Optimism (99.5, 99.8)
• 02/10 8:15 ADP Weekly NER Pulse (7,750, --)
• 02/10 8:30 Import Price Index MoM (-0.1% rev, 0.1%), YoY (0.1%, 0.1%)
• 02/10 8:30 Export Price Index MoM (--, 0.1%), YoY (3.3%, 3.0%)
• 02/10 8:30 Employment Cost Index (0.8%, 0.8%)
• 02/10 8:30 Retail Sales Advance MoM (0.6%, 0.4%), Ex Auto MoM (0.5%, 0.4%)
• 02/10 10:00 Business Inventories (0.3%, 0.2%)
• 02/10 1130 US Tsy $90B 6W bill auction 
• 02/10 1200 Cleveland Fed Hammack on banking & economic outlook
• 02/10 1300 Dallas Fed Logan at Asset Management Derivatives Forum
• 02/10 1300 US Tsy $58B 3Y Note auction (91282CQA2)
• Source: Bloomberg Finance L.P. / MNI

• Constructive price action for precious metals and equities on Monday have facilitated a revival of the bearish dollar narrative. The stabilisation for risk sentiment late last week had been a key factor into the recent dollar recovery stalling, and the DXY returning to the prior breakdown point around the 98.00 mark appears to have provided an attractive entry point for those looking to reengage shorts.
• Renewed dollar pessimism appears to have also been bolstered by reports that Chinese officials urged banks to limit purchases of US government bonds and instructed those with high exposure to reduce their positions. The DXY is currently 0.8% lower on the session as we approach the APAC crossover, providing an interesting dynamic as we approach the plethora of tier-one US data this week.
• AUDUSD’s impressive 1.15% rally on Monday has seen spot narrow in on its respective cycle peak at 0.7094. Above this bull trigger, markets will turn their focus to 0.7158, the Feb 2 2023 high and 0.7208, a Fibonacci retracement level.
• The Swiss Franc has matched the Australian dollar as one of the best performing majors on Monday and while USDCHF has not returned to recent extremes, EURCHF has notably dipped to a fresh low of 0.9127, which represents the worst levels since the removal of the floor in 2015.
• USDJPY has posted an impressive 225 pip range following Sunday’s election in Japan. While Takaichi’s victory initially weighed on the yen as markets focused on the concerns surrounding the fiscal trajectory, subsequent remarks from officials on monitoring FX and the broader weakness have assisted the reversal to levels sub-156.00.
• US retail sales data headlines Tuesday’s calendar, while markets will then swiftly turn their focus to US employment (Wed) and US CPI (Fri).