Talking Points:
– USDOLLAR Threatens Bearish Setup; Yellen Testimony in Focus
– GBP/USD at Risk for Bearish Inside-Day (Harami) as U.K. Wage Growth Disappoints
– USD/CAD Climbs to Fresh Monthly High as Bank of Canada (BoC)Talks Down Inflation Risk

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10432.84

10446.13

10425.49

0.06

75.35%

USDOLLAR (Ticker: USDollar):
Dow Jones-FXCM U.S. Dollar Index climbs to a fresh monthly high of 10,446 as U.S. Producer Price Index (PPI) beats forecast, but very limited follow-through behind the initial market reaction.
Remains at risk for a larger correction as it clears 10,440 (78.6% Fibonacci retracement) & with the bullish break in the Relative Strength Index (RSI) gathering pace.
Nevertheless, will continue to look for a lower-high as the USDOLLAR retains the bearish channel from earlier this year while Fed remains reluctant to move away from its highly accommodative policy.
Fed Chair Janet Yellen delivers same prepared remarks to House Financial Services Committee; focus turns to the Q&A with lawmakers.

GBP/USD:
British Pound struggled to benefit from the 36.3K decline in U.K. Jobless Claims as wage growth disappoints.
Nevertheless, bullish outlook remains favorable as the ongoing improvement in the labor market paired with the threat of an asset-bubble keeps the Bank of England (BoE) on course to normalize monetary policy sooner rather than later.
With market participants turning their to the BoE Minutes due out on July 23, the main focus will be on the vote count as we look for a greater dissent within the Monetary Policy Committee (MPC).

USD/CAD:
Spikes to a fresh monthly high of 1.0793 as Bank of Canada (BoC) talks down inflation risk.
Nevertheless, BoC argues next move has become more neutral and continues to see a ‘soft landing’ in the housing market.
Looks as though we will continue to see a shift in the BoC’s guidance; still looking for a lower-high as USD/CAD retains downward trending channel from earlier this year.

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Read More:
Price & Time: EUR/USD Closing In On “Make or Break” Levels
EUR/USD Falls to Crucial July 2012 Trendline; GBP-crosses Resilient

USDOLLAR Daily

Chart – Created Using FXCM Marketscope 2.0
Interim Resistance: 10,508 (61.8% retracement) to 10,524 (38.2% retracement)
Interim Support: 10,354 (Oct. low) to 10,375 (50.0& retracement)

Release

GMT

Expected

Actual

MBA Mortgage Applications (JUL 11)