Talking Points:
- Bearish USDOLLAR Outlook Remains Favored Amid String of Lower-Highs
- EUR/USD Needs Close Below 1.3570-80 to Favor Further Decline
- AUD/USD Threatens Bullish Formation Ahead of RBA Minutes
USDOLLAR(Ticker: USDollar):
Dow Jones-FXCM U.S. Dollar Index remains capped by trendline resistance; favors downside bias as the USD continues to carve string over lower highs & lows this week.
Despite the greater discussion to normalize monetary policy, the Federal Open Market Committee (FOMC) Minutes failed to present anything new that would spur a material shift in the policy outlook.
Focus now turns to the Humphrey-Hawkins Testimony scheduled for next week; may see further USD weakness should Fed Chair Janet Yellen retain a dovish tone for monetary policy.
With the USDOLLAR carving a lower-high in July, the October low (10,354) will become the next key level of interest.
EUR/USD:
Giving back the weekly advance after failing to push above 1.3650-80 resistance.
Need a close below 1.3570 (61.8% Fibonacci retracement) along with a break of the bullish trend in the Relative Strength Index (RSI) to favor downside targets.
Looks poised to retain the broad range amid the ongoing uncertainty surrounding the European Central Bank’s (ECB) non-standard measures.
AUD/USD:
Threatens trendline support as Australia Employment disappoints, China trade surplus narrows.
Would still need a break below interim support around 0.9330-40 to see a move back towards the 0.9200 handle.
Reserve Bank of Australia (RBA) Minutes, which are due out next week, may trigger another decline in the AUD/USD should the central bank continue to toughen its verbal intervention.
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USDOLLAR Daily
Chart – Created Using FXCM Marketscope 2.0
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 Continues to Carve Lower-Highs; Broader EUR/USD Range in Focus
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