USD Eyes Key Fib Retracement

Posted By : MRG Mega Berjangka, Sep 22, 2014 – 22:50

DailyFX.com -

Talking Points:

- EUR/USD Slips to Fresh Monthly Low (1.2820) as ECB President Draghi Reiterates Dovish Tone

- AUD/USD Eyes 78.6% Retracement of 2014 Range Ahead of China PMI, RBA Rhetoric

- Bullish USDOLLAR Setup Remains in Play Even as Fed’s William Dudley Favors 2015 Rate Hike

EUR/USD

EUR/USD dips to a fresh monthly low of 1.2820 as European Central Bank (ECB) President Mario Draghi sees further expansion in balance sheet and remains prepared to take more action as needed.
Bearish outlook remains favored as Governing Council plans to provide a more detailed asset-backed securities (ABS) purchase plan at the October 2 meeting; next key region of interest comes in around 1.2710 (78.6% expansion) to 1.2725 (23.6% retracement).
DailyFX Speculative Sentiment Index (SSI) continues to favor a further decline in the EUR/USD as there appears to be a further buildup of the net-long position, with the ratio currently standing at +1.53.

AUD/USD

Downside targets remain favored for AUD/USD as the Relative Strength Index (RSI) retains bearish momentum & dips back into oversold territory.
Next key downside objective is 88.30-40, 78.6% Fibonacci retracement of the 2014 range- break & close below raises risk of seeing a full retracement of the rebound from January (0.8659).
China’s HSBC Purchasing Manager Index (PMI) may heighten the bearish sentiment surrounding the Australian dollar should the data print dampen the outlook for global trade.

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USDOLLAR(Ticker: USDollar):

Index	Last	High	Low	Daily Change (%)	Daily Range (% of ATR)
DJ-FXCM Dollar Index	10945.64	10956.01	10913.18	0.01	88.21%

Chart - Created Using FXCM Marketscope 2.0

Dow Jones-FXCM U.S. Dollar Index presses to a fresh yearly high of 10,956 despite the slew of dismal data, while New York Fed President William Dudley favors rate hike in 2015.
Despite the key speeches from the group of central bank doves, the technical outlook continues to favor the topside as long as price & RSI retain the bullish trend.
Will be watching 10,989 (50.0% expansion) to 11,009 (July 2013 high) ahead of the Fed’s next policy meeting on August 29 amid the pickup in interest rate expectations.

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Release	GMT	Expected	Actual
Chicago Fed National Activity Index (AUG)	12:30	0.33	-0.21
Existing Home Sales (AUG)	14:00	5.20M	5.05M
Existing Home Sales (MoM) (AUG)	14:00	1.0%	-1.8%
Fed's William Dudley Speaks on U.S. Economy	14:05
Fed's Narayana Kocherlakota Speaks on Monetary Policy	23:30

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--- Written by David Song, Currency Analyst

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MRG MEGA BERJANGKA