Talking Points:
– USD/CAD Range Remains in Play Despite Upbeat BoC.
– AUD/USD Eyes Former Support Ahead of Australia Employment Report, China CPI.
– USDOLLAR Bullish Outlook Remains Favored as Bullish RSI Trigger Takes Shape.
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USD/CAD
Chart – Created Using FXCM Marketscope 2.0
Even though the long-term outlook for USD/CAD remains bullish, the pair may continue to face range-bounce prices in the days ahead as the Bank of Canada (BoC) retains its current policy and endorses an upbeat outlook for the region.
Will keep a close eye on the relationship between oil prices and the Canadian dollar as the BoC continues to measure the impact on the real economy; Relative Strength Index (RSI) is also on the radar as it struggles to preserve the bullish momentum carried over from April.
DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-short USD/CAD since June 18, but the ratio continues to come off of recent extremes as it narrows to -1.31, with 43% of traders long.
AUD/USD
Downside targets remain favored for AUD/USD as price & RSI retain the bearish formations from earlier this year; will watch former support around 0.7080 (38.2% expansion) to 0.7090 (78.6% retracement) for new resistance, with a break/close above opening up the next key region of interest around 0.7220 (23.6% expansion) to 0.7240 (100% expansion).
However, another 5.0K expansion in Australia Employment along with an uptick in China’s Consumer Price Index (CPI) may generate a larger rebound in AUD/USD as it dampens speculation for the Reserve Bank of Australia (RBA) to further embark on its easing cycle.
Nevertheless, the next downside target lies around 0.6830 (161.8% expansion) to 0.6860 (61.8% expansion).
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Read More:
Price & Time: USD/CHF – Consolidation Almost Over?
USDCAD Levels to Know Ahead of BoC – 1.3335 Marks Critical Resistance
USDOLLAR(Ticker: USDollar):
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
12057.49
12059.14
12019.2
0.25
71.48%
Chart – Created Using FXCM Marketscope 2.0
With the Dow Jones-FXCM U.S. Dollar finally marking a closing price above 12,049 (78.6% retracement), bullish outlook retains favored especially as the RSI breaks out of the downward trend from July.
Despite narrowing bets for a September liftoff, language still pointing to a 2015 rate hike may keep the dollar afloat over the near to medium-term amid the growing deviation in the policy outlook.
With the USDOLLAR marking a higher-high in September, topside targets are in focus, with the next level of interest coming in around 12,162 (April high) to 12,176 (78.6% expansion).
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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