Talking Points:
– EUR/USD Continues to Carve Narrowing Range Ahead of Euro-Zone 3Q GDP.
– AUD/USD Rebound to Face Long-Dating Bearish RSI Momentum.
– USDOLLAR Wedge/Triangle Remains in Play Ahead of Retail Sales, U. of Michigan Confidence.
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EUR/USD
Chart – Created Using FXCM Marketscope 2.0
The Euro-Zone’s 3Q Gross Domestic Product (GDP) report may act as a key fundamental trigger for EUR/USD amid the narrowing range in the exchange rate; long-term outlook remains bearish.
Despite expectations of seeing a rebound in the euro-area, long-term outlook for EUR/USD remains bearish as the European Central Bank (ECB) prepares to implement more non-standard measures in December.
Seeing increased volatility in the DailyFX Speculative Sentiment Index (SSI) as retail-crowd as now turned net-short on EUR/USD, with the ratio currently holding at -1.04.
AUD/USD
Despite the fresh monthly high, AUD/USD is coming into a key juncture as it approaches the 0.8760-70 zone (61.8% retracement) along with trendline resistance on the Relative Strength Index (RSI).
Will retain a bearish outlook & look for another lower-high in AUD/USD as long as the momentum indicator retains the downward trend from earlier this year.
Long-term outlook for AUD/USD remains bearish amid the growing deviation in the policy outlook, especially with the Reserve Bank of Australia (RBA) jawboning the higher-yielding currency.
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Read More:
Price & Time: GBP/USD Not in the “Free & Clear” Just Yet
Australian Dollar Drops as RBA Official Threatens FX Intervention
USDOLLAR(Ticker: USDollar):
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
11259.89
11270.64
11239.54
0.05
51.53%
Chart – Created Using FXCM Marketscope 2.0
The wedge/triangle formation in the Dow Jones-FXCM U.S. Dollar Index continues to suggest a continuation of the longer-term trend, but will keep a close eye on the RSI as the bearish divergence remains in play.
A rebound in U.S. Retail Sales along with another uptick in U. of Michigan Confidence may heighten the bullish sentiment surrounding the greenback as New York Fed President William Dudley, a permanent voting member on the FOMC, sees scope to remove the zero-interest rate policy (ZIRP) in mid-2015.
Need to see the RSI break out of the bearish formation to look for a further advance in USDOLLAR, with the next topside objectives coming in around 11,312 (78.6% retracement) and 11,351 (78.6% expansion).
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Release
GMT
Expected
Actual
Initial Jobless Claims (NOV 8)
13:30
280K
290K
Continuing Claims (NOV 1)
13:30
2347K
2392K
JOLTS Job Openings (SEP)
15:00
4800
4735
Monthly Budget Statement (OCT)
19:00
-$117.0B
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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