Talking Points:
– USDOLLAR at Risk for Lower Low Ahead of FOMC Meeting
– AUDUSD Looking to Fill Weekly Opening Gap; Watching for Close Above 0.9100
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
10513.81
10562.78
10508.34
-0.46
152.75%
USDOLLAR Daily
Chart – Created Using FXCM Marketscope 2.0
Failure to Push Above 10,590 (50.0 retracement) Risks Lower High
Interim Resistance: 10,602 (38.2 retracement) to 10,615 (78.6 expansion)
Interim Support: 10,470 Pivot
Release
GMT
Expected
Actual
Advance Retail Sales (FEB)
12:30
0.2%
0.3%
Advance Retail Sales ex Autos (FEB)
12:30
0.1%
0.3%
Advance Retail Sales ex Auto and Gas (FEB)
12:30
0.2%
0.3%
Advance Retail Sales Control Group (FEB)
12:30
0.2%
0.3%
Initial Jobless Claims (MAR 8)
12:30
330K
315K
Continuing Claims (MAR 1)
12:30
2903K
2855K
Import Price Index (MoM) (FEB)
12:30
0.5%
0.9%
Import Price Index (YoY) (FEB)
12:30
-1.9%
-1.1%
Business Inventories (JAN)
14:00
0.4%
0.4%
The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) extended the decline from earlier this week despite the slew of positive developments coming out of the U.S. economy, and the greenback faces a growing risk for a lower low as the Relative Strength Index (RSI) threatens the bullish momentum carried over from the previous month.
As mentioned in DailyFX on Demand, a downside break in the RSI may push the USDOLLAR back down towards the 10,470 region, and we will maintain our approach for ‘selling bounces’ in the greenback as it carves a lower high in March.
With that said, we may have to wait the Federal Open Market Committee (FOMC) interest rate decision to see a meaningful rebound in the dollar as the central bank is widely expected to reduce its asset-purchase program by another $10B, and we will continue to watch the downside targets ahead of the policy meeting as the reserve currency search for support.
AUDUSD Daily
Waiting for Opening Gap to be Filled on Close-Basis; Needs Close Above 0.9100
Interim Resistance: 0.9200 (100.0% expansion) to 0.9210 (61.8% retracement)
Interim Support: 0.8670 (100.0% expansion) to 0.8700 (78.6% retracement)
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The greenback weakened across the board, led by a 1.21 percent advance in the Australian dollar, and the AUDUSD looks poised to fill the Sunday opening gap on a close-basis following the upbeat employment report coming out of the $1T economy.
Indeed, the technical outlook continues to favor further advance for the AUDUSD as price and RSI retains the bullish trend from earlier this year, but a failed close above 0.9100 may generate a pullback in the exchange rate as the Reserve Bank of Australia (RBA) looks for a weaker currency.
In turn, we will maintain a long-term bearish outlook for the Australian dollar, and the AUDUSD may continue to carve a lower high in March as Governor Glenn Stevens prefers the exchange rate close to the 0.8500 handle.
— 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
