EUR/USD Waits for ECB, Fed Catalyst- GBP Threatens Bearish Momentum
Talking Points:
- EUR/USD Holds Tight Range Ahead of ECB’s Targeted LTRO Program
- GBP/USD Risks Further Decline on Dovish BoE Minutes, Scotland Independence
- USDOLLAR Extends Advance Ahead of FOMC Meeting; Forward-Guidance in Focus
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EUR/USD
- Looks as though the EUR/USD will face a narrowing range as European Central Bank (ECB) looks to offer the targeted Long-Term Refinance Operation (LTRO) on September 18.
- Depending on the outcome, ECB’s ‘turbocharged quantitative easing (QE)’ program may come under question on whether the non-standard measure will have the intended impact; may raise bets for more easing.
- The DailyFX Speculative Sentiment Index (SSI) continues to narrow, but shows retail-crowd remains net-long on EUR/USD as ratio currently stands at +1.24.
GBP/USD
- GBP/USD looks poised for a larger rebound as the Relative Strength Index (RSI) comes off of oversold territory; need break of bearish momentum to favor topside targets.
- Seems like Bank of England (BoE) Minutes will continue to show 7-2 split; biggest risk for surprise surrounds the Scotland Referendum, with the vote taking place on September 18.
- Next key downside region to watch is the 1.6000 handle (50.0% retracement), but need to see a break and closing price above the 1.6280-1.6300 region (former support) to favor a larger rebound.
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Read More:
AUDCHF Monthly Opening Range Setup- Scalps Target Key Support
Dollar Looks to Fed to Secure Strongest Run in Half a Century
USDOLLAR(Ticker: USDollar):
|
Index |
Last |
High |
Low |
Daily Change (%) |
Daily Range (% of ATR) |
|
DJ-FXCM Dollar Index |
10872.82 |
10883.13 |
10853.66 |
0.15 |
74.70% |
Chart - Created Using FXCM Marketscope 2.0
- Dow Jones-FXCM U.S. Dollar Index climbs.
- A close above 10869 (78.6% retracement) raises the risk of seeing a full retracement of the decline from July 2013 high (11,009) especially as the RSI continues to push deeper into overbought territory.
- The DailyFX SSI continues to show the retail-crowd remains net-short USD ahead of the Federal Open Market Committee (FOMC) interest rate decision; will look for a more detailed forward-guidance for monetary policy as the central bank looks to halt its asset-purchase program in October.
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|
Release |
GMT |
Expected |
Actual |
|
Advance Retail Sales (AUG) |
12:30 |
0.6% |
0.6% |
|
Advance Retail Sales ex Autos (AUG) |
12:30 |
0.3% |
0.3% |
|
Advance Retail Sales ex Auto and Gas |
12:30 |
0.5% |
0.5% |
|
Advance Retail Sales Control Group (AUG) |
12:30 |
0.5% |
0.4% |
|
Import Price Index (MoM) (AUG) |
12:30 |
-1.0% |
-0.9% |
|
Import Price Index (YoY) (AUG) |
12:30 |
-0.6% |
-0.4% |
|
U. of Michigan Confidence (SEP P) |
13:55 |
83.3 |
84.6 |
|
Business Inventories (JUL) |
14:00 |
0.4% |
0.4% |
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--- Written by David Song, Currency Analyst
To contact David, e-mail [email protected]. Follow me on Twitter at @DavidJSong.
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