Talking Points:
– USD/JPY Bearish RSI Divergence in Focus Ahead of BoJ Policy Meeting.
– AUD/USD Rebound Vulnerable to RBA Verbal Intervention.
– USDOLLAR at Risk of Larger Correction as Bullish RSI Momentum Comes Under Pressure.

For more updates, sign up for David’s e-mail distribution list.

USD/JPY

USD/JPY may have carved a key top ahead of the Bank of Japan (BoJ) interest rate decision as the bearish divergence in the Relative Strength Index (RSI) becomes increasingly clear.
Still seeing expectations the BoJ will further expand its asset-purchase program at the October 7 meeting as the Federal Reserve moves away from its easing cycle.
Even though DailyFX Speculative Sentiment Index (SSI) has narrowed for USD/JPY, the indicator continues to show net-short retail position in USD/JPY, with the ratio currently standing at -1.22.

AUD/USD

AUD/USD looks poised for a larger rebound as the RSI comes off of overbought territory & carves a near-term series of higher-highs & lows.
Even though the Reserve Bank of Australia is widely expected to maintain a period of ‘interest rate stability,’ may see Governor Glenn Stevens retain the verbal intervention on the Australian dollar in order to further assist with the rebalancing of the real economy.
As the AUD/USD retains the longer-dating bearish RSI momentum, the next key downside target comes in around 0.8525 (50.0% expansion) to 0.8540 (50.0% retracement).

Join DailyFX on Demand for Real-Time SSI Updates Across the Majors!

Read More:
Price & Time: Godot Still A No Show
October Forex Seasonality Foretells End of Seasonal USD Weakness

USDOLLAR(Ticker: USDollar):

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

11078.54

11138

11074.31

-0.45

113.53%

Chart – Created Using FXCM Marketscope 2.0
Dow Jones-FXCM U.S. Dollar Index looks vulnerable as the RSI remains capped by the 83.00 region & threatens the bullish momentum carried over from July.
Beyond the Federal Open Market Committee (FOMC) Minutes, the fresh batch of central bank rhetoric from Fed doves may heavily impact the dollar as the Non-Farm Payrolls (NFP) report continues to highlight subdued wage growth.
Will wait for a bearish RSI break to favor a larger USDOLLAR pullback; will watch former resistance zone for new support, which comes in around 10, 752 (38.2% expansion) to 10,759 (61.8% retracement).

Join DailyFX on Demand for Real-Time SSI Updates!

Release

GMT

Expected

Actual

No Scheduled Releases

Click Here for the DailyFX Calendar

— Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

To be added to David’s e-mail distribution list, please follow this link.

Trade Alongsidethe DailyFX Team on DailyFX on Demand

Looking to use the DailyFX Trade Signals LIVE? Check out Mirror Trader.

New to FX? Watch this Video

Join us to discuss the outlook for the major currencies on the DailyFXForums

Source: Daily fx