Talking Points:
– GBP/USD to Break Out of Descending Channel on Scotland ‘No’ Vote
– USD/CAD Risks Larger decline on Sticky Canadian Consumer-Price Inflation
– USDOLLAR at Risk for More Meaningful Correction as RSI Threatens Bullish Momentum

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GBP/USD

GBP/USD climbs to a fresh weekly high of 1.6408 ahead of the results to the Scotland Referendum, with the Relative Strength Index (RSI) continuing to come off of oversold territory; need to see a break & close above 1.6410 (61.8% retracement) to 1.6430 (50.0 expansion) to favor a bullish breakout.
However, the GBP/USD may struggle to hold above 1.6000 (50.0% retracement) should Scotland vote to leave the U.K.
DailyFX Speculative Sentiment Index (SSI) continues to show relative net-short U.S. dollar positioning, but the ratio for the GBP/USD continues to narrow as it stands at +1.09.

USD/CAD

USD/CAD may face a larger decline over the next 24-hours of trade should Canada’s Consumer Price Index (CPI) boost interest rate expectations.
Headline reading is expected to show sticky price growth, while the core rate of inflation is expected to increase an annualized 1.8% in August after expanding 1.7% the month prior.
Strong Canada CPI print may undermine the bullish outlook for USD/CAD; break & close below the August low (1.0809) would invalidate the inverse head-and-shoulders formation.

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Big Day for FX Markets – What We’re Watching

USDOLLAR(Ticker: USDollar):

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10900.2

10938.37

10884.95

-0.18

117.31%

Chart – Created Using FXCM Marketscope 2.0
Dow Jones-FXCM U.S. Dollar Index falls back from a fresh yearly high of 10,884 amid the mixed batch of data; Dallas Fed President Richard Fisher, the new dissenter on the Federal Open Market Committee (FOMC) is scheduled to speak at 21:00 GMT.
Despite the bullish reaction to the FOMC interest rate decision, the RSI highlights the risk for a larger correction should the oscillator fail to retain the bullish momentum.
Break of channel support may bring up former resistance around 10,758 (23.6% expansion) to 10,759 (61.8% retracement).

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Release

GMT

Expected

Actual

Initial Jobless Claims (SEP 13)