Talking Points:
– USDOLLAR Struggles Despite Upbeat Consumer Confidence Report
– EURUSD Weighed by Dovish ECB Rhetoric; Watching for Higher Low
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
10558.33
10563.03
10539.91
0.09
60.98%
USDOLLAR Daily
Chart – Created Using FXCM Marketscope 2.0
Outlook Remains Bearish Following Lower High; At Risk for Lower Low
Interim Resistance: 10,602 (38.2 retracement) to 10,615 (78.6 expansion)
Interim Support: 10,470 Pivot
Release
GMT
Expected
Actual
House Price Index (MoM) (JAN)
13:00
0.60%
0.5%
S&P/Case-Shiller Composite-20 s.a. (MoM) (JAN)
13:00
0.60%
0.85%
S&P/Case-Shiller Composite-20 (YoY) (JAN)
13:00
13.34%
13.24%
S&P/Case-Shiller Home Price Index (JAN)
13:00
165.73
165.50
Consumer Confidence (MAR)
14:00
78.5
82.3
Richmond Fed Manufacturing Index (MAR)
14:00
4
-7
New Home Sales (FEB)
14:00
445K
440K
New Home Sales (MoM) (FEB)
14:00
-4.9%
-3.3%
Fed’s Dennis Lockhart Speaks on U.S. Economy
20:00
Fed’s Charles Plosser Speaks on U.S. Economy and Monetary Policy
23:00
The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is struggling to hold its ground despite the unexpected uptick in U.S Consumer Confidence, and the bearish trend may continue to take shape over the near-term as the greenback carves a lower high in March.
Despite expectations of seeing a more hawkish Fed in the coming months, the dollar may continue to carve lower highs & lower lows until the central bank halts its asset-purchase program later this year, and the greenback remains at risk of giving back the rebound from back in October (10,354) as the Chair Janet Yellen looks to carry the zero-interest rate policy (ZIRP) into 2015.
With that said, we will continue to look of opportunities to ‘sell bounces’ in the greenback as it remains capped by 10,600-15 region, and the reserve currency may continue to work its way towards the 10,470 handle as it continues to search for support.
EURUSD Daily
Remains at Risk for Larger Correction After Marking Higher High in March
Interim Resistance: 1.3960-70 (61.8% expansion)
Interim Support: 1.3600 Pivot to 1.3620 (23.6 retracement)
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The greenback advanced against two of the four components, led by a 0.38 percent decline in the Euro, and the single currency may weaken further ahead of the European Central Bank (ECB) meeting on April 3 as we see a growing number of central bank officials adopt a more dovish tone for monetary policy.
Indeed, ECB board member Jens Weidmann argued negative rates would be more appropriate in weakening the Euro, while Governing Council member Jozef Makuch anticipates further declines in the single currency, and it seems as though the central bank will push for a weaker exchange amid the ‘higher’ risk for deflation.
As a result, the ECB may continue to implement non-standard measures over the coming months, but we will need to see the EURUSD move below the 1.3500 handle to get increasingly bearish on the pair as it maintains the series of higher highs & higher lows carried over from the previous year.
— 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
