Talking Points:
– USDOLLAR Preserves October Low(10,473); Monthly Opening Range in Focus
– EURUSD Hits Fresh High (1.3606) on European Central Bank (ECB) Meeting
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
10480.31
10518.19
10476.15
-0.22
82.04%
USDOLLAR Daily
Chart – Created Using FXCM Marketscope 2.0
Holds Above October 1st Low (10,473); Watch Opening Range Take Shape
Bearish Relative Strength Index Momentum Approaching Oversold
Interim Resistance: 10,582 (23.6 expansion) to 10,589 (50.0 retracement)
Soft Support: 10,469 (June low)
Release
GMT
Expected
Actual
ADP Employment Change (SEP)
12:15
180K
166K
Fed’s Eric Rosengren Speaks on U.S. Economy
16:00
55.0
56.5
Fed’s Bullard to Speak on Community Banks
19:20
16.00M
?
Fed Chairman Ben Bernanke Speaks on Banking Sector
19:30
12.43M
?
The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) remains under pressure amid the deadlock in Congress, and we’ll be keeping a close eye on the monthly opening ranges as market participants look towards the Federal Open Market Committee (FOMC) interest rate decision on October 29-30.
With Fed Chairman Ben Bernanke scheduled to speak later today, his response to the government shutdown may reflect a greater willingness to further delay the exit strategy, but the event may have a limited impact on the dollar should the central bank head merely read his prepared remarks on the U.S. banking sector.
From a technical standpoint, the bearish momentum in the Relative Strength Index may bring fresh monthly lows in the days, but a near-term resolution from Congress may spark a relief rally in the dollar, which could prompt a more sideways trend.
EURUSD Daily
Climbs to Fresh High (1.3606); RSI Coming Up Against Overbought
Made 8 Failed Attempts to Close Above 1.13530-40 (61.8 expansion)
Interim Resistance: 1.3650-60 (78.6 expansion)
Interim Support: 1.3450-60 (50.0 expansion)
Once again, all four components strengthened against the greenback, led by another 0.65 percent advance in the Japanese Yen, while the EURUSD appears to be on a more bullish path driven by the more neutral tone struck by the European Central Bank (ECB).
Indeed, it seems as though the lack of more-dovish ECB commentary was enough to prop up the EURUSD, and the pair looks poised to finally make a close above 1.13530-40 (61.8 expansion) as market participants scale back bets of seeing another Long-Term Refinancing Operation (LTRO) over the near-term.
In turn, the next topside objective comes in around 1.3650-60 (78.6 expansion), but a material shift in the RSI may trigger a key reversal as the oscillator approaches overbought territory.
— 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