Talking Points:
– USDOLLAR Outlook Hinges on FOMC; ‘Qualitative’ Approach on Tap
– GBPUSD Threatens Key Support Ahead of Budget Statement, BoE Minutes
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
10504.59
10522.15
10504.43
-0.07
50.72%
USDOLLAR Daily
Chart – Created Using FXCM Marketscope 2.0
Fails to Maintain March Opening Range; Growing Risk for Lower Low Amid RSI Break
Interim Resistance: 10,602 (38.2 retracement) to 10,615 (78.6 expansion)
Interim Support: 10,470 Pivot
Release
GMT
Expected
Actual
Consumer Price Index (MoM) (FEB)
12:30
0.1%
0.1%
Consumer Price Index ex Food and Energy (MoM) (FEB)
12:30
0.1%
0.1%
Consumer Price Index (YoY) (FEB)
12:30
1.2%
1.1%
Consumer Price Index ex Food and Energy (YoY) (FEB)
12:30
1.6%
1.6%
Consumer Price Index Core s.a. (FEB)
12:30
236.202
236.122
Consumer Price Index n.s.a. (FEB)
12:30
234.699
234.781
Housing Starts (FEB)
12:30
910K
907K
Housing Starts (MoM) (FEB)
12:30
3.4%
-0.2%
Building Permits (FEB)
12:30
960K
1018K
Building Permits (MoM) (FEB)
12:30
1.6%
7.7%
Net Long-Term TIC Flows (JAN)
13:00
$40.0B
$7.3B
Total Net TIC Flows (JAN)
13:00
—
$83.0B
The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) may chop around ahead of the Federal Open Market Committee (FOMC) interest rate decision as it holds within the previous day’s range, but the fresh developments coming out of the policy meeting may set the tone for the remainder of the month as the central bank is widely expected to implement a ‘qualitative’ approach for monetary policy.
There’s growing speculation that the FOMC will tie its forward-guidance to a broad range of economic indicators as the jobless rate approaches the 6.5 percent threshold for unemployment, and we may see the dollar continue to give back the advance from back in October should Fed Chair Janet Yellen implement a more dovish twist to the policy outlook.
With that said, the USDOLLAR may continue to carve a series of lower highs & lower lows as the Fed remains reluctant to move away from the zero-interest rate policy, while we may see a growing rift within the committee as central bank hawks Richard Fisher and Charles Plosser look to normalize monetary policy sooner rather than later.
GBPUSD Daily
Fails to Maintain Monthly Opening Range, While Price & RSI Retains Bullish Trend
Interim Resistance: 1.6850-60 (78.6 expansion)
Interim Support: 1.6540 (38.2 expansion) to 1.6550 (78.6 expansion)
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The Australian dollar continued to lead the advance against the greenback, with the higher-yielding currency gaining largely benefitting from the rise in risk appetite, while the British Pound is struggling to hold its ground ahead of the key economic releases coming out over the next 24-hours of trading.
Indeed, the GBPUSD threatened key support around the 1.6540-50 region amid the recent weakness in the European bloc, but another close above the 1.6600 handle should reinforce a bullish outlook for the pair as price and the RSI preserves the upward trend carried over from the previous year.
In turn, the GBPUSD may continue to carve a high lower in March, and we will revert back to ‘buying dips’ in the pair should the Bank of England (BoE) Minutes highlight a greater willingness to raise the benchmark interest rate off of the record-low.
— 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