Talking Points:
– EUR/USD Outlook Weighed as EU Tries to Buy More Time For Greece.
– GBP/USD Threatens Bearish Channel Ahead of BoE Inflation Report..
– USDOLLAR Outlook Vulnerable to Further Contraction in Retail Sales.
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EUR/USD
Chart – Created Using FXCM Marketscope 2.0
EUR/USD remains vulnerable as Greece struggles to secure a bailout agreement with the EU; may put increased pressure on the European Central Bank (ECB) to further support the monetary union as policy makers struggle to meet on common ground.
Will retain a bearish outlook for EUR/USD as long as the Relative Strength Index (RSI) preserves the downward trend dating back to October 2013.
DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-short EUR/USD, but seeing the ratio narrow as it currently stands at -1.56.
GBP/USD
GBP/USD making another assault at channel resistance ahead of the Bank of England (BoE) inflation report; remains at risk for a larger rebound as the RSI has already broken out of the bearish momentum.
There’s growing speculation the BoE may further reduce its inflation forecast, but will keep a close eye on the forward-guidance for monetary policy as Governor Mark Carney continues to prepare U.K. households and businesses for higher borrowing-costs.
Will keep a close eye on the opening range, with the key region of interest coming in around the former support zone near 1.5500-10.
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Read More:
AUDCAD Threatens Weekly Opening Range- Long Scalps Favored Above 9750
Weekly Setups Target Key Opening Ranges in USD, GBP, Gold & Silver
USDOLLAR(Ticker: USDollar):
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
11873.83
11877.34
11827.79
0.31
74.66%
Chart – Created Using FXCM Marketscope 2.0
Dow Jones-FXCM U.S. Dollar may retain the monthly opening range as U.S. Advance Retail Sales are expected to contract another 0.4% contraction in January.
A further downturn in household spending may dampen the Fed’s scope to normalize monetary policy in mid-2015 as lower energy prices fail to boost private-sector consumption.
Will continue to watch the broader range from 11,721 (38.2% expansion) to 11,901 (78.6% expansion).
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Release
GMT
Expected
Actual
MBA Mortgage Applications (FEB 6)
12:00
—
-9.0%
Fed’s Richard Fisher Speaks on U.S. Economy
13:00
Monthly Budget Statement
19:00
-$19.0B
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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