Talking Points:
– USD/CAD Retains Bearish RSI Momentum Despite Dismal Canada Retail Sales.
– GBP/USD Continues to Carve Lower-Highs Ahead of U.K. CPI, Retail Sales.
– USDOLLAR Correction Remains in Play- Inflation Report in Focus.
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USD/CAD
Chart – Created Using FXCM Marketscope 2.0
Despite the dismal Canada Retail Sales report, USD/CAD may continue to consolidate as the bearish momentum in the Relative Strength Index (RSI) remains intact.
The stickiness in Canada’s Consumer Price Index (CPI) may keep the Bank of Canada (BoC) on the sidelines; will keep a close eye on the near-term range between 1.2400-1.2800.
Have been seeing increased volatility in the DailyFX Speculative Sentiment Index (SSI) amid the range-bound price action in USD/CAD as the retail crowd is now let-long on the pair, with the ratio currently holding at +1.17.
GBP/USD
Ongoing string of closes above 1.4700-10 (78.6% expansion) raises the risk for a larger rebound in GBP/USD as the RSI continues to come off of oversold territory.
Despite expectations of seeing a rebound in U.K. Retail Sales, a marked slowdown in the U.K.’s Consumer Price Index (CPI) may produce further for the sterling as the disinflationary environment drags on interest rate expectations.
Still need a close above the 1.5000-15 (50% expansion) to favor a more meaningful correction in GBP/USD.
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Bullish USD Outlook Mired Post FOMC- JPY, GBP & Gold in Focus
USDOLLAR(Ticker: USDollar):
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
11980.76
12093.53
11975.84
-0.90
145.39%
Chart – Created Using FXCM Marketscope 2.0
Ongoing series of lower-highs in the Dow Jones-FXCM U.S. Dollar index raise the risk for a larger correction; will revert back to ‘buying dips’ in the greenback once the RSI breaks out of the bearish momentum.
Despite expectations of seeing another annualized 0.1% contraction in the U.S. Consumer Price Index (CPI), the core rate of inflation may help to keep the dollar afloat as the figure is projected to climb an annualized 1.7% in February after expanding 1.6% the month prior.
Will continue to watch the low following the Federal Open Market Committee (FOMC) interest rate decision, but need a close below 11,894 (61.8% retracement) to 11,901 (78.6% expansion) to favor a more meaningful decline in the USDOLLAR.
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Release
GMT
Expected
Actual
Initial Jobless Claims (MAR 14)
12:30
293K
291K
Continuing Claims (MAR 7)
12:30
2400K
2417K
Philadelphia Fed Business Optimism Survey (MAR)
14:00
7.0
5.0
Leading Index (FEB)
14:00
0.2%
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