USD Attempts to Break Out Ahead of Fed Testimony- Time to Buy GBP?

Posted By : MRG Mega Berjangka, Jul 14, 2014 – 22:10

DailyFX.com -

Talking Points:

- USDOLLAR Threatens Bearish Setup; Yellen Testimony in Focus

- GBP/USD Posts Larger Correction Ahead of U.K. CPI; Buy Opportunity?

- Bullish AUD/USD Formation at Risk as RBA Toughens Verbal Intervention

Index	Last	High	Low	Daily Change (%)	Daily Range (% of ATR)
DJ-FXCM Dollar Index	10416.31	10421.32	10403.68	0.06	63.73%

USDOLLAR (Ticker: USDollar):

Dow Jones-FXCM U.S. Dollar Index at risk for larger correction as price & RSI fail to maintain bearish trend.
With the broader downward trending channel still in play, downside targets remain favorable, while former support around 10,440 (78.6% retracement) may offer near-term resistance.
The Humphrey-Hawkins Testimony with Fed Chair Janet Yellen presents the largest event risk for the USDOLLAR; will we get more of the same?

GBP/USD:

Will continue to look for closing prices above the 1.7100 handle as 1.7060-70 (23.6% retracement) offers intraday support.
U.K. Consumer Price Index (CPI) may limit the correction as headline reading for inflation is expected to increase an annualized 1.6% in June.
Topside targets remain favorable as price & RSI preserve bullish formations from earlier this year.

AUD/USD:

May fail to preserve ascending channel formation should the Reserve Bank of Australia (RBA) Minutes highlight recent comments from Governor Glenn Stevens.
Near-term support still stands at 0.9330-40; need break and close below to see a move back towards the 0.9200 handle.
China 2Q Gross Domestic Product (GDP) will also be a key event risk to watch as the growth rate is expected to expand 1.8% versus 1.4% during the first three-months of 2014.