Talking Points:
– EUR/USD Fails to Benefit from Upbeat 3Q GDP Ahead of ECB President Draghi’s Testimony.
– USD/JPY Threatens Bearish RSI Momentum Ahead of Japan 3Q GDP & BoJ Meeting.
– USDOLLAR Marks Fresh Monthly High on Retail Sales- FOMC Minutes in Focus.
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EUR/USD
Chart – Created Using FXCM Marketscope 2.0
Despite the better-than-expected 3Q Gross Domestic Product (GDP) report coming out of the euro-area, EUR/USD remains capped ahead of the 1.2500 handle; focus now turns to European Central Bank (ECB) President Mario Draghi’s quarterly testimony to the European parliament.
Will continue to favor a bearish outlook for EUR/USD as the Governing Council prepares to implement more non-standard measures in December, with the next downside objective coming in around 1.2280-90 (100% expansion).
DailyFX Speculative Sentiment Index (SSI) continues to flip around this week, but retail-crowd are net-short on EUR/USD going into the weekend, with the ratio currently holding at -1.05.
USD/JPY
Will keep a close eye on the Relative Strength Index (RSI) for USD/JPY as the oscillator threatens the bearish momentum carried over from back in September.
Beyond Japan’s 3Q GDP report & the Bank of Japan (BoJ) interest rate decision, headlines surrounding the fiscal outlook may further dampen the appeal of the Yen amid the heightening risk for a snap election in December.
Long-term outlook for remains bullish for USD/JPY amid the uncertainties surrounding the fiscal & monetary policy outlook for Japan, with the next topside target coming in around 117.00-10 (61.8% expansion).
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USDOLLAR(Ticker: USDollar):
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
11260.22
11323.6
11248.06
-0.01
123.03%
Chart – Created Using FXCM Marketscope 2.0
Despite the better-than-expected U.S. Retail Sales report, the Dow Jones-FXCM U.S. Dollar Index is struggling to retain the advance to 11,323 even as St. Louis Fed President James Bullard sees scope to raise the benchmark interest rate at the end of 1Q 2015; will Federal Open Market Committee (FOMC) Minutes highlight a greater dissent?
Nevertheless, will keep a close eye on the headlines coming out of the G20 Summit in Brisbane amid the growing deviation in monetary policy.
Will continue to look for a topside RSI break out of the bearish formation favor a more meaningful push into the 11,312 (78.6% retracement) and 11,351 (78.6% expansion) region.
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Release
GMT
Expected
Actual
Advance Retail Sales (MoM) (OCT)
13:30
0.2%
0.3%
Advance Retail Sales ex Auto (MoM) (OCT)
13:30
0.2%
0.3%
Advance Retail Sales ex Auto and Gas (MoM) (OCT)
13:30
0.4%
0.6%
Advance Retail Sales Control Group
13:30
0.4%
0.5%
Import Price Index (MoM) (OCT)
13:30
-1.5%
-1.3%
Import Price Index (YoY) (OCT)
13:30
-1.6%
-1.8%
Fed’s James Bullard Speaks on U.S. Economy
14:10
U. of Michigan Confidence (NOV P)
14:55
87.5
89.4
Business Inventories (SEP)
15:00
0.2%
0.3%
Mortgage Delinquencies (3Q)
15:00
—
5.85%
MBA Mortgage Foreclosures (3Q)
15:00
—
2.39%
Fed’s Fischer, Powell Speak at Fed/ECB Event
21:00
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— Written by David Song, Currency Analyst
To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.
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Source: Daily fx