Talking Points:
– GBP/USD Remains Capped by Bearish RSI Momentum; BoE Hawks on Tap
– AUD/USD Outlook Mired by Renewed Bets for RBA Rate Cut,Weakening Outlook for China.
– USDOLLAR Comes Off of Channel Resistance; Retail Sales & U. of Michigan Confidence in Focus.
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GBP/USD
Chart – Created Using FXCM Marketscope 2.0
GBP/USD coming off of key support around 1.5540 (61.8% expansion) to 1.5550 (78.6% retracement), but need a break of the bearish momentum in the Relative Strength Index (RSI) to favor a larger rebound.
Will keep a close on the news wires with Bank of England (BoE) hawks Martin Weale and Ian McCafferty are scheduled to speak this week.
DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-long GBP/USD since October 28, with the ratio currently holding at +1.32.
AUD/USD
AUD/USD remains vulnerable to a further decline on the back of the weakening outlook for China – Australia’s largest trading partner; will retain approach to sell-bounces as RSI pushes deeper into oversold territory.
Despite renewed bets for additional monetary support from the Reserve Bank of Australia (RBA), the region’s employment report may heighten the appeal of the higher-yielding currency as job growth is expected to climb another 15.0K in November.
Will watch the 0.8200 handle for psychological support, but next key downside level of interest comes in around 0.8150 (100% expansion).
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USDOLLAR(Ticker: USDollar):
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
11487.21
11522.86
11479.8
-0.07
82.20%
Chart – Created Using FXCM Marketscope 2.0
Even though Dow Jones-FXCM U.S. Dollar struggles to break channel resistance, topside targets remain favored as RSI pushes back into overbought territory.
Another uptick in U.S. Advance Retail Sales & U. of Michigan Confidence survey should further boost the bullish sentiment surrounding the greenback as it bodes well for the holiday shopping season and fuels interest rate expectations.
Will continue to keep a close eye on 11,539 (78.6% expansion) followed by 11,623 (100% expansion).
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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