Talking Points:
– USDOLLAR Remains Capped by Former Support Zone as ISM Disappoints
– AUD/USD Eyes 0.9200 Support Ahead of RBA Interest Rate Decision
– USD/CAD Breakout in Focus Ahead of BoC Meeting, Canada Employment

The lack of momentum to push back above former support may continue to produce a series of lower-highs & lower-lows in the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) as the Federal Reserve is widely expected to retain its current approach for monetary policy at the June 18 meeting.

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10518.13

10525.74

10494.7

0.24

105.12%

Despite expectations of seeing another 215K rise in U.S. Non-Farm Payrolls (NFP), the slowdown in the ISM Manufacturing survey’s employment component (51.9) limits the scope for a stronger-than-expected print, and the dollar may struggle to maintain the advance carried over from the previous month should the fundamental developments coming out of the world’s largest economy continue to drag on interest rate expectations.

As a result, we may see the former support zone (10,508-524) turn into resistance, and will favor ‘selling bounces’ in the greenback as long as the bearish break in the Relative Strength Index (RSI) continues to take shape in June.

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Read More:
Price & Time: Keep A Close Eye on USD/JPY This Week
June Forex Seasonality Sees US Dollar Outperformance versus Aussie, Euro

USDOLLAR Daily

Chart – Created Using FXCM Marketscope 2.0
Carving Lower High at Former Support?
Interim Resistance: 10,602 (38.2 retracement) to 10,615 (78.6 expansion)
Interim Support: 10,354 to 10,375 (50.0 retracement)

Release

GMT

Expected

Actual

Markit Purchasing Manager Index Manufacturing (MAY F)

13:45

—

56.4

ISM Manufacturing (MAY)

14:00

55.5

53.2

ISM Prices Paid (MAY)

14:00

56.9

60.0

Construction Spending (MoM) (APR)

14:00

0.6%

0.2%

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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