Talking Points:
– EUR/USD Remains Stuck in Descending Triangle Despite Dismal 2Q GDP
– USD/JPY Continues to Carve Lower-Highs in August; 101.00 Remains Key Support
– USDOLLAR Struggling to Hold Bullish RSI Momentum Ahead of U. of Michigan Confidence
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
10561.45
10580.23
10551.83
-0.06
97.99%
EUR/USD:
Despite the dismal 2Q Euro-Zone Gross Domestic Product (GDP) report, the EUR/USD rallied into 1.3402 as there appeared to be broad dollar weakness.
Nevertheless, the string of lower-highs in August continues to cast a bearish outlook for the EUR/USD as the pair appears to be stuck in a descending triangle formation.
Even though the DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-long on EUR/USD, the ratio has come off of its recent highs and sits at +1.38.
USD/JPY:
USD/JPY also continues to carve a series of lower-highs in August; retains the bearish trend from January.
With Japan 2Q GDP beating market expectations, seems as though the Bank of Japan (BoJ) will retain its current course for monetary policy.
Long-term descending triangle formation remains in play, with the 101.00 handle holding up as key support.
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Read More:
Price & Time: Opportunities in the Cross Rates
Potential Euro Reversal Situations Develop as Weak GDP Weighs Little
USDOLLAR Daily
Chart – Created Using FXCM Marketscope 2.0
USDOLLAR(Ticker: USDollar):
Dow Jones-FXCM U.S. Dollar Index faces an increased risk of a near-term top as the RSI struggles to preserve the bullish momentum.
Will be looking for a bearish RSI break paired with a close below 10,561 (100% expansion) to favor a larger pullback.
Nevertheless, a near-term correction may provide a ‘buy the dip’ opportunity as the Federal Open Market Committee (FOMC) remains on course to halt its asset-purchase program in October.
Interim Resistance: 10,590 (50.0% retracement) to 10,604 (38.2% retracement)
Interim Support: 10,440 (78.6% retracement) to 10,450 Pivot
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Release
GMT
Expected
Actual
Initial Jobless Claims (AUG 9)
12:30
295K
311K
Continuing Claims (AUG 2)
12:30
2507K
2544K
Import Price Index (MoM) (JUL)
12:30
-0.3%
-0.2%
Import Price Index (YoY) (JUL)
12:30
0.8%
0.8%
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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