Dollar On Key Support Ahead of PMIs

Durable Goods PlungeThe US Dollar is starting the day under pressure on Friday as traders await the latest PMI data due later today.  Ahead of the Thanksgiving holiday in the US yesterday, October durable goods data was seen contracting deeper-than-forecast on Wednesday. At -5.6%, the reading marked a sharp shift from the prior month’s 4.6% result and was below the -3.2% the market was looking for. While not top tier data, the release is feeding into the view that the Fed will hold off from further tightening and, with the sense that the US economy is slowing down, rate cut bets are starting to build across H1 next year.PMIs Up NextLooking ahead today, the focus will be on the latest services and manufacturing PMIs. Both readings are expected to have cooled last month, with manufacturing forecast to have fallen into contractionary territory. If confirmed, the data should keep the current narrative intact, keeping USD pressured to the downside.Volatility RisksThe bigger weight on USD today would likely be seen if the services PMI fell into negative territory, given the bigger share of GDP the sector represents. With many US traders taking a long weekend from Yesterday’s Thanksgiving break, thinner trading means there is potential for plenty of volatility if we see any significant data surprises today.Technical ViewsDXYThe sell off in DXY has seen the index trading down to test the 103.48 level, where the market is currently stalled. With momentum studies bearish, the focus is on a further break lower here with 101.22 the next support area to note for bears. To the topside, bulls will need to see a move back above 104.95 to alleviate the bearish bias.