Talking Points:
- USDOLLAR Eyes Former Support; Non-Farm Payrolls to Climb 219K
- EUR/USD Coming Up Against Former Support Ahead of ECB Rate Decision
- USD/CAD Fails to Break Out Despite Weak Canada 1Q GDP; BoC Meeting in Focus
The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) may continue to work its way back towards former resistance (10,470) ahead of the highly anticipated Non-Farm Payrolls (NFP) report as the bearish break on the Relative Strength Index (RSI) gathers pace.
Indeed, the recent weakness in the dollar may turn into a larger decline as the reserve currency carves a lower-high in May, but a rate cut by the European Central Bank (ECB) paired with another 200+K rise in U.S. NFPs may spur a material shift in the technical outlook should the key event risks deviate from market expectations.
With that said, we will retain a prudent approach going into June as we’ll be watch the monthly opening range take shape, and we may see a sharp rise in market volatility throughout the summer months amid the prospects for a more material shift in the policy outlook.
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Read More:
First Quarter Growth Disappointment Drives the Canadian Dollar Lower
USDOLLAR Daily
Chart – Created Using FXCM Marketscope 2.0
Former Resistance (10,470) in Focus as Bearish RSI Break Gathers Pace
Interim Resistance: 10,602 (38.2 retracement) to 10,615 (78.6 expansion)
Interim Support: 10,354 to 10,375 (50.0 retracement)
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— Written by David Song, Currency Analyst
To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.
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Bearish EUR/USD Outlook Favored Below Former Support on ECB Policy
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