Talking Points:
– EUR/USD Risks Further Losses on Dovish ECB Draghi; RSI Remains in Focus
– USD/JPY Topside Targets Favored on Slowing Japan Consumer Price Inflation
– USDOLLAR Climbs to Fresh 2014 High (10,941) as Fed’s Fisher Favors Reducing Reinvestment

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EUR/USD

EUR/USD remains at risk for a further decline as Relative Strength Index (RSI) largely retains bearish momentum; move back into oversold territory may highlight a further decline .
With European Central Bank (ECB) President Mario Draghi scheduled to speak next week, may see expectations for a larger asset-back securities (ABS) purchase program amid the dismal take-up of the targeted long-term refinancing operations (T-LTRO).
DailyFX Speculative Sentiment Index (SSI) reinforces bearish outlook for EUR/USD as the ratio currently stands at +1.47.

USD/JPY

Topside targets remain favored for USD/JPY as RSI retains bullish momentum & pushes deeper into overbought territory.
Japan’s Consumer Price Index (CPI) may heighten bets of seeing the Bank of Japan (BoJ) further expand its asset-purchase program at the October 7 policy meeting.
Next topside target comes in around 109.65 (100% expansion) to the 110.00 pivot.

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Read More:
Gold Near Bottom of Range or About to Break Down?
Volume Figures Not Supporting Most Recent Leg Down in Euro

USDOLLAR(Ticker: USDollar):

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10940.53

10941.73

10874.41

0.48

141.07%

Chart – Created Using FXCM Marketscope 2.0
Dow Jones-FXCM U.S. Dollar Index climbs to a fresh monthly high of 10,941 despite the weaker-than-expected print for U.S. Leading Index.
Appears as though there’s a growing dissent within the Federal Open Market Committee (FOMC) as voting member Richard Fisher favors reducing reinvestment before raising the benchmark interest rate.
Next topside objective comes in around 10,989 (50.0% expansion) to 11,009 (July 2013 high).

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Release

GMT

Expected

Actual

Leading Index (AUG)

14:00

0.4%

0.2%

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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