Talking Points:
– AUD/USD Range Support in Focus as RBA Governor Glenn Stevens Endorses Dovish Stance.
– EUR/USD Continues to Eye 1.0970-90 Resistance Ahead of Greek Meeting.
– USDOLLAR Remains at Risk as Fed Liftoff Remains ‘Uncertain.’
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AUD/USD
Chart – Created Using FXCM Marketscope 2.0
AUD/USD may continue to give back the rebound from earlier this month (0.7532) should the Reserve Bank of Australia (RBA) Minutes fuel speculation for a rate cut at the May 5 meeting as Governor Glenn Stevens keeps the door open to further reduce the cash rate; need a close below 0.7570 (50% expansion) to 0.7590 (100% expansion) along with a break of the bullish RSI momentum to favor a resumption of the long-term bearish trend.
Beyond expectations for a slowdown in Australia’s 1Q Consumer Price Index (CPI), the core rate of inflation may limit the downside risk for the aussie as its expected to hold steady at an annualized 2.2% during the first three-months of 2015.
DailyFX Speculative Sentiment Index (SSI) shows the retail crowd remains net-short AUD/USD since April 15, with the ratio holding at -1.03.
EUR/USD
EUR/USD may face a relief rebound as European policy makers work to stem the risk for a Greek default/exit; positive developments out of the euro-area may spur another move at 1.0865 (38.2% retracement)
Nevertheless, long-term outlook remains bearish as the European Central Bank (ECB) looks to stick to its current course for monetary policy, while the RSI retains the long-term bearish momentum.
Lack of momentum to close above 1.0970 (38.2% expansion) to 1.0990 (50% retracement) may highlight a near-term topping process in EUR/USD.
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USDOLLAR(Ticker: USDollar):
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
12008.70
12013.61
11954.04
0.31
84.16%
Chart – Created Using FXCM Marketscope 2.0
Despite the lack of momentum to retain the monthly opening range, Dow Jones-FXCM U.S. Dollar may continue to track sideways over the near-term amid the ongoing closes above 11,951 (38.2% expansion) to 11,952 (50-Day SMA).
Seeing little evidence that the Federal Open Market Committee (FOMC) will have a majority for a June rate hike as New York Fed President William Dudley retains a cautious outlook for the economy and argues that the timing of liftoff remains ‘uncertain.’
Failure to retain the monthly opening range along with the bearish RSI momentum continues to highlight the downside risk for USDOLLAR, with key support standing around 11,869 (23.6% expansion) to 11,901 (78.6% expansion).Join DailyFX on Demand for Real-Time SSI Updates!
Release
GMT
Expected
Actual
Chicago Fed National Activity Index (MAR)
12:30
0.10
-0.42
Fed’s William Dudley Speaks on U.S. Economy
12:30
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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