Talking Points:
- USDOLLAR at Risk of Carving Lower High Amid Bearish RSI Break
- USD/JPY Dips Back Below 101.50 Ahead of Japan CPI
- USD/CAD Downward Trend in Focus Ahead of Canada 1Q GDP
The near-term advance in the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) appears to be coming to an end as the Relative Strength Index (RSI) fails to maintain the bullish momentum from earlier this year.
In light of the marked downward revision to the 1Q GDP print, the ongoing weakness in U.S. economy may continue to drag on interest rate expectations, and it seems as though the greenback is carving out a lower-high ahead of the next Fed meeting on June 18 as the fundamental developments coming out of the region limits the scope for a material change in the policy outlook.
With that said, we will revert back to the approach of ‘selling bounces’ in the greenback should we continue to see a series of lower-highs & lower-lows in the USDOLLAR, but the European Central Bank (ECB) meeting on tap for the week ahead may heighten the appeal of the reserve currency as the Governing Council is widely expected to further embark on its easing cycle.
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Read More:
Price & Time: Caution Required in the Kiwi Over the Next Few Days
Euro and Gold Prices Near Critical Levels – What’s the Next Move?
USDOLLAR Daily
Chart – Created Using FXCM Marketscope 2.0
Failure to Maintain Bullish RSI Momentum to Highlight Lower High
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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USD/JPY at Risk for Lower Low on Japan CPI- 100.50 in Focus
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