Talking Points:
– USDOLLAR Slips to Fresh Monthly Low (10,468); Non-Farm Payrolls Delayed
– GBPUSD at Risk of Larger Correction Ahead of Bank of England (BoE) Meeting
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
10470.29
10493.32
10468.11
-0.09
50.96%
USDOLLAR Daily
Chart – Created Using FXCM Marketscope 2.0
Opening Range Continue to Take Shape; Fresh Monthly low (10,468)
Waiting for Bearish Relative Strength Index Momentum to Break for Rebound
Interim Resistance: 10,582 (23.6 expansion) to 10,589 (50.0 retracement)
Interim Support: 10,449 (100.0 expansion)
Release
GMT
Expected
Actual
Challenger Job Cuts (YoY) (SEP)
11:30
—
19.1%
Initial Jobless Claims (SEP 27)
12:30
315K
308K
Continuing Claims (SEP 20)
12:30
2805K
2925K
ISM Non-Manufacturing Composite (SEP)
14:00
57.0
54.4
Fed’s John Williams Speaks on U.S. Economy
15:00
Fed’s Richard Fisher Speaks on U.S. Economy
16:30
Fed’s Dennis Lockhart Speaks on U.S. Labor Market
17:00
Fed’s Jerome Powell Speaks on Banking System
17:30
Fed’s Richard Fisher Speaks on U.S. Economy
21:30
The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) continues to threaten the June low (10,469) as the weaker-than-expected ISM Non-Manufacturing survey dampens the prospects for a stronger recovery, and the reserve currency may face additional headwinds over the near-term as the fiscal drag continues to limit the Fed’s scope to taper the asset-purchase program.
With more Fed speeches on tap for later today, we may see a growing number of central bank officials adopt a more cautious tone ahead of the October 29-30 meeting amid the government shutdown, and the reserve currency may continue to search for support as the bearish momentum in the Relative Strength Index continues to take shape.
In turn, we may see the USDOLLAR continue to carve a series of lower highs paired with lower lows, and the bearish sentiment surrounding the greenback may gather pace ahead of the debt limit amid the deadlock in Congress.
GBPUSD Daily
Retails Upward Trending Channel Dating Back to July
RSI Falling Back from Overbought; Bullish Trend at Risk
Interim Resistance: 1.6300 Pivot
Interim Support: 1.6000 Pivot
Two of the four components advanced against the greenback, led by a 0.43 percent rally in the Euro, while the British Pound bucked the trend, with the GBPUSD struggling to hold above the 1.6200-10 region, the 23.6 percent Fibonacci retracement of the 2009 range.
The GBPUSD may face a more meaningful correction in the coming days as the RSI falls back from overbought territory, and the pair may ultimately threaten the bullish trend dating back to July should the oscillator fail to hold trendline support.
In turn, the British Pound may work its way back towards the 1.6000 handle ahead of the Bank of England (BoE) meeting on tap for October 10, but a more material shift in the policy outlook may trigger another run at 1.6300 as Governor Mark Carney moves away from the easing cycle.
— 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