Talking Points:
– Gold Bullish RSI Break Favors Larger Correction; Former Support Zones in Focus.
– USD/CAD Advances on Dismal Canada Building Permits; Inverse Head-and-Shoulders Remains in Play.
– USDOLLAR at Risk for Larger Pullback as RSI Falls Back From Overbought Territory.
For more updates, sign up for David’s e-mail distribution list.
Gold
Long-term outlook for Gold remains bearish, but looks poised for a larger correction as the Relative Strength Index (RSI) breaks out of the bearish momentum carried over from July.
As the International Monetary Fund (IMF) cuts its global growth forecast, fears of weaker demand may heighten the bearish sentiment surrounding the bullion.
Will watch former support regions for a lower-high; first area of interest comes in around $1,231 (78.6% retracement) to $1,234 (78.6% retracement).
USD/CAD
USD/CAD pares decline from earlier this week as Canada Building Permits contract 27.3% in August; limits the scope of seeing the Bank of Canada (BoC) adopt a hawkish tone for monetary policy.
Inverse head-and-shoulders formation continues to favor topside targets especially as the bullish RSI momentum remains in play.
Even though the DailyFX Speculative Sentiment Index (SSI) has narrowed from the extreme readings, retail crowd remains net-short on USD/CAD as the ratio stands at -1.21.
Join DailyFX on Demand for Real-Time SSI Updates Across the Majors!
Read More:
Price & Time: USD/JPY Change in Behaviour
3 USD Trades to Watch Ahead of FOMC Minutes
USDOLLAR(Ticker: USDollar):
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
11028.53
11078.45
11010.44
-0.15
113.28%
Chart – Created Using FXCM Marketscope 2.0
Dow Jones-FXCM U.S. Dollar Index correction looks poised to gather pace over the near-term as the RSI fails to preserve the bullish momentum & falls back from overbought territory.
Fresh commentary from Federal Open Market Committee (FOMC) voting members Narayana Kocherlakota & William Dudley to larger be in focus ahead of meeting minutes.
Keeping a close eye on former resistance zone for new support; 10, 752 (38.2% expansion) to 10,759 (61.8% retracement) will be the first key region of interest.
Join DailyFX on Demand for Real-Time SSI Updates!
Release
GMT
Expected
Actual
JOLTS Job Openings (AUG)
14:00
4700
4835
IBD/TIPP Economic Optimism (OCT)
14:00
45.1
45.2
Fed’s Narayana Kocherlakota Speaks on Monetary Policy
18:30
Consumer Credit (AUG)
19:00
$20.000B
Fed’s William Dudley Speaks on U.S. Economy
19:00
Click Here for the DailyFX Calendar
— Written by David Song, Currency Analyst
To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.
To be added to David’s e-mail distribution list, please follow this link.
Trade Alongsidethe DailyFX Team on DailyFX on Demand
Looking to use the DailyFX Trade Signals LIVE? Check out Mirror Trader.
New to FX? Watch this Video
Join us to discuss the outlook for the major currencies on the DailyFXForums
Source: Daily fx
