Talking Points:
– GBP/USD Lags Major Counterpart as Jobless Claims Disappoints While Wage Growth Ticks Higher.
– Gold Hits Fresh Monthly High amid Dollar Weakness; Bullish RSI Momentum Favors Larger Correction.
– USDOLLAR Slips to Fresh Monthly Low Amid Slew of Dismal Data; Fed Rhetoric in Focus.
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GBP/USD
GBP/USD lags its major counterparts and continues to carve a series of lower highs & lows as U.K. Jobless Claims falls 18.6K in September to mark the smallest decline since May 2013.
Despite the uptick in Average Weekly Earnings, the bearish sentiment surrounding the British Pound may continue to gather pace over the near-term as the majority of the Bank of England (BoE) remains in no rush to normalize monetary policy.
DailyFX Speculative Sentiment Index (SSI) continues highlight the risk for a further decline in GBP/USD as the retail crowd continues to fight the bearish trend, with the ratio currently sitting at +1.42.
Gold
Gold climbs to a fresh monthly high of $1,249 and looks poised for a larger correction amid the weakness in the greenback; will continue to favor topside targets as the bullish RSI momentum gathers pace.
Despite weakening oil prices, precious metals may continue to follow U.S. dollar price action, but the near-term advance may get exhausted relative soon amid the steep slopes in price & RSI .
Next key topside region of interest comes in around $1,270 (50.0% expansion) to $1,276 (61.8% retracement).
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Read More:
Price & Time: What is Gold Really Telling Us?
When Will GBP-crosses Find Support? – EUR/GBP, GBP/JPY, GBP/USD
USDOLLAR(Ticker: USDollar):
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
10985.91
11077.18
10920.41
-0.64
224.20%
Chart – Created Using FXCM Marketscope 2.0
Dow Jones-FXCM U.S. Dollar Index slips to fresh monthly low of 10,918 as U.S. Retail Sales, Empire Manufacturing and Producer Prices disappoint; want to see a close below 10,989 (50.0% expansion) to favor a further decline.
Appears to be carving a bullish flag pattern ahead of the Federal Open Market Committee (FOMC) meeting on October 29; will the Beige Book fuel interest rate expectations?
10,869 (78.6% retracement) to 10,887 (61.8% retracement) is on our radar amid the bearish patterns, followed by 10, 752 (38.2% expansion) to 10,759 (61.8% retracement).
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Release
GMT
Expected
Actual
MBA Mortgage Applications (OCT 10)
11:00
—
5.6%
Empire Manufacturing (OCT)
12:30
20.25
6.17
Advance Retail Sales (SEP)
12:30
-0.1%
-0.3%
Advance Retail Sales ex Autos (SEP)
12:30
0.2%
-0.2%
Advance Retail Sales ex Auto and Gas (SEP)
12:30
0.4%
-0.1%
Retail Sales Control Group (SEP)
12:30
0.4%
-0.2%
Producer Price Index (MoM) (SEP)
12:30
0.1%
-0.1%
Producer Price Index (YoY) (SEP)
12:30
1.8%
1.6%
Producer Price Index ex Food and Energy (MoM) (SEP)
12:30
0.1%
0.0%
Producer Price Index ex Food and Energy (YoY) (SEP)
12:30
1.7%
1.6%
Business Inventories (AUG)
14:00
0.4%
0.2%
Monthly Budget Statement (SEP)
18:00
$90.0B
$105.8B
Federal Reserve Publishes Beige Book
18:00
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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