Talking Points:
– USDOLLAR Pares Decline Amid Bets for December Taper
– Euro to Resume Bearish Trend on Negative Deposit Rates
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
10572.33
10575.45
10540.26
0.22
70.01%
USDOLLAR Daily
Chart – Created Using FXCM Marketscope 2.0
Preserves Downward Trend Ahead of Fed Minutes
Bullish Relative Strength Index Taking Shape
Interim Resistance: 10,658 (61.8 extension)- Former Support
Interim Support: 10,470 Pivot- Closing Basis
Release
GMT
Expected
Actual
Advance Retail Sales (OCT)
13:30
0.1%
Advance Retail Sales Less Autos (OCT)
13:30
0.1%
Advance Retail Sales Less Auto and Gas
13:30
0.4%
Advance Retail Sales Control Group
13:30
0.2%
Consumer Price Index (MoM) (OCT)
13:30
0.0%
Consumer Price Index (YoY) (OCT)
13:30
1.0%
Consumer Price Index ex Food & Energy (MoM) (OCT)
13:30
0.1%
Consumer Price Index ex Food & Energy (YoY) (OCT)
13:30
1.7%
Consumer Price Index n.s.a. (OCT)
13:30
233.511
Consumer Price Index Core Index s.a. (OCT)
13:30
Fed’s William Dudley Speaks on U.S. Economy
15:00
Existing Home Sales (OCT)
15:00
5.16M
Existing Home Sales (MoM) (OCT)
15:00
-2.5%
Business Inventories (SEP)
15:00
0.3%
Fed’s James Bullard Speaks on U.S. Economy
17:10
Federal Open Market Committee Meeting Minutes
19:00
The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) pared the decline from earlier this week as St. Louis Fed President James Bullard, who votes on the Federal Open Market Committee (FOMC) this year, saw scope to taper the asset-purchase program at the December 17-18 meeting, and the fresh batch of central bank rhetoric may encourage a more meaningful recovery in the greenback as market participants continue to weigh the outlook for monetary policy.
The dollar may ultimately threaten the downward trend from back in July as the Relative Strength Index appears to be carving a more bullish structure, and the FOMC Minutes may strengthen the case for further dollar advances should the central bank show a greater willingness to move away from its easing cycle.
However, the advance to 10,641 may serve as a lower high should the policy statement undermine the taper-timeline laid out by Chairman Ben Bernanke, and the greenback may push to a lower low in the coming days if the Fed shows a greater willingness to carry its highly accommodative policy stance into 2014.
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EURUSD Daily
Fails to Hold Trendline Support; Correction Over?
Relative Strength Index Carving Bearish Trend
Interim Resistance: 1.3570-80 (23.6 retracement)
Interim Support: 1.3290 (50.0 retracement) to 1.3300 Pivot
Two of the four components weakened against the greenback, led by a 0.63 percent decline in the Euro, and the single currency remains poised to face additional headwinds over the near-term as the European Central Bank (ECB) shows a greater willingness to implement negative deposit rates for the monetary union.
It seems as though the run towards 1.3570-80 will serves as a lower high as the pair fails to maintain the upward trend, and the single currency may work its way back towards the 1.3300 handle as a head-and-shoulders top takes shape.
In turn, we will look for opportunities to ‘sell bounces’ in the EURUSD, and the policy outlook may continue to drive the exchange rate lower as the ECB remains primed to further embark on its easing cycle.
— 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
