Talking Points:
– GBP/USD Breakout to Gather Pace on Sticky Core Inflation, Strong Job/Wage Growth.
– AUD/USD Opening Monthly Range Remains in Focus as RBA Strikes Balanced-Tone.
– USDOLLAR Extends Decline From Fresh Monthly High as U. of Michigan Confidence Disappoints.
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GBP/USD
Chart – Created Using FXCM Marketscope 2.0
Despite expectations of seeing a further slowdown in the U.K. Consumer Price Index (CPI), the stickiness in the core rate of inflation may limit the downside risk for GBP/USD as the Bank of England (BoE) retains its hawkish forward-guidance for monetary policy.
Will keep a close eye on U.K. Jobless Claims & Average Weekly Earnings as the BoE looks for a the fastest pace of wage growth in over a decade.
Seeing increased volatility in the DailyFX Speculative Sentiment Index (SSI) as retail crowd turned net-long GBP/USD as of February 12, with the ratio currently sitting at +1.15.
AUD/USD
Despite the dismal Australia Employment report, looks as though AUD/USD will preserve the opening monthly range as the Relative Strength Index (RSI) shows a more meaningful push off of oversold territory.
Recent commentary from Reserve Bank of Australia (RBA) Governor Glenn Stevens suggests the central bank will retain its current policy at the March 2 meeting, but seeing growing speculation for a rate cut as market participants price a 70% for another 25bp reduction in the cash rate according to overnight index swaps.
Near-term resistance comes in at 0.7850 (61.8% expansion) to 0.7880 (38.2% retracement), but will keep a close eye on former support around 0.8020-30 should AUD/USD mount a larger recovery in the days ahead.
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DailyFX Technical Focus: 2/12/2015
AUDCAD Threatens Weekly Opening Range- Long Scalps Favored Above 9750
USDOLLAR(Ticker: USDollar):
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
11788.65
11810.96
11769.85
-0.14
57.82%
Chart – Created Using FXCM Marketscope 2.0
Dow Jones-FXCM U.S. Dollar continues to come off of fresh monthly high (11,886) as the dismal U. of Michigan Confidence survey dampens the outlook for private-sector consumption.
Federal Open Market Committee (FOMC) Minutes will certainly be in focus next week as central bank officials continue to call for a mid-2015 rate hike; will the Fed continue to look for faster consumption on lower energy prices?
With the ongoing range-bound price action in USDOLLAR, need a break/close out of the 11,721 (38.2% expansion) to 11,901 (78.6% expansion) region for a clearer direction bias.
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Release
GMT
Expected
Actual
Import Price Index (MoM) (JAN)
13:30
-3.2%
-2.8%
Import Price Index (YoY) (JAN)
13:30
-8.9%
-8.0%
U. of Michigan Confidence Survey (FEB P)
15:00
98.1
93.6
Fed’s Richard Fisher Speaks on U.S. Economy
18:30
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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