Talking Points:
– USDOLLAR Rallying Into Former Support Following FOMC Minutes
– Australian Dollar Fails to Maintain Bullish Momentum- At Risk for Lower Low
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
10593.85
10595.25
10563.08
0.20
86.86%
USDOLLAR Daily
Chart – Created Using FXCM Marketscope 2.0
Former Support in Focus as USD Searches for Lower High
Interim Resistance: 10,657 (61.8 expansion)- Former Support
Interim Support: 10,509 (23.6 retracement) to 10,524 (38.2 retracement)
Release
GMT
Expected
Actual
Consumer Price Index (MoM) (JAN)
13:30
0.1%
0.1%
Consumer Price Index (YoY) (JAN)
13:30
1.6%
1.6%
Consumer Price Index ex Food & Energy (MoM) (JAN)
13:30
0.1%
0.1%
Consumer Price Index ex Food & Energy (YoY) (JAN)
13:30
1.6%
1.6%
Consumer Price Index n.s.a. (JAN)
13:30
233.770
233.916
Consumer Price Index Core Index s.a. (JAN)
13:30
235.884
235.843
Initial Jobless Claims (FEB 15)
13:30
335K
336K
Continuing Claims (FEB 7)
13:30
2970K
2981K
Markit Purchasing Manager Index (FEB P)
13:58
53.6
56.7
Philadelphia Fed. (FEB)
15:00
8.0
-6.3
Mortgage Delinquencies (4Q)
15:00
—
6.39%
MBA Mortgage Foreclosures (4Q)
15:00
—
2.86%
Leading Indicators (JAN)
15:00
0.3%
0.3%
The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) continued to retrace the sharp decline from earlier this month following the Federal Open Market Committee (FOMC) Minutes, and the short-term rebound may gather pace over the remainder of the week as the central bank remains poised to discuss another $10B taper at the March 19 meeting.
With Fed Chair Janet Yellen scheduled to testify in front of the Senate Banking Committee on February 27, the relief rally may gather pace ahead of the key event as a growing number of central bank officials see Quantitative Easing (QE) coming to an end later this year, but the bearish momentum in the Relative Strength Index (RSI) may limit the recent advance in the USDOLLAR as it comes up against former support.
With that said, the greenback could be at risk of carving a new series of lower highs paired with lower lows, and we may see former support (10,604-10,615) act as new resistance as the recent weakness in economic activity weighs on the interest rate outlook.
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AUDUSD Daily
Price & RSI Retain Bullish Trend- Former Resistance Acting as New Support?
Interim Resistance: 0.9050 (23.6% expansion) to 0.9070 (38.2% retracement)
Interim Support: 0.8670 (100.0% expansion) to 0.8700 (78.6% expansion)
The greenback rallied against all four components, led by a 0.31 percent decline in the Euro and British Pound, while the Australian dollar remains at risk for a larger decline as the AUDUSD carves a lower high in February.
Indeed, the technical outlook for the aussie-dollar is turning increasingly bearish as the RSI fails to maintain the upward trend carried over from the previous month, and the higher-yielding currency remains at risk of facing fresh lows over the near to medium-term as the $1T economy faces subdued wage growth along with higher unemployment.
In turn, the Reserve Bank of Australia (RBA) may have little choice but to further embark on its easing cycle, and we will maintain our long-term bearish outlook for the AUDUSD amid the deviation in the policy outlook.
— 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
