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EUR/JPY Rebound to Target Former Support- Gold Capped by 50-Day SMA

By , Currency Analyst
22 May 2014 16:00 GMT

Talking Points:

- USDOLLAR Outlook Still Bearish as Monthly Opening Range Remains Intact

- AUD/JPY Rebound Stalls at Former Support (0.9430-50)

- XAU/USD Capped by 50-Day SMA (1303); Risks Key Break Ahead of June

Despite the mixed data prints coming out of the world’s largest economy, the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) may make a more meaningful attempt to close above the 10,470 pivot ahead of June as it fails to maintain the descending channel from earlier this year.

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10490.85

10492.71

10465

0.24

90.08%

The greenback may face a larger correction in the coming days amid the bullish break in price and the Relative Strength Index (RSI), but the lack of momentum to clear the opening monthly range may continue to foster a bearish outlook for the reserve currency as the Federal Reserve remains in no rush to normalize monetary policy.

With that said, we will preserve our bearish outlook for the USDOLLAR as it appears to be carving a lower high in May, and the greenback remains at risk of facing additional headwinds over the near-term as Fed Chair Janet Yellen continues to highlight the ongoing slack in the real economy. In turn, we will need to see a more material shift in the policy outlook to favor a constructive view for the dollar.

EUR/JPY Rebound to Target Former Support- Gold Capped by 50-Day SMA

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Read More:

Price & Time: Approaching Key Levels, But EUR/USD Remains Vulnerable

GBPNZD Scalps Target May Opening Range Break- Bullish Above 1.96

USDOLLAR Daily

EUR/JPY Rebound to Target Former Support- Gold Capped by 50-Day SMA

Chart - Created Using FXCM Marketscope 2.0

  • Need Break of Monthly Opening Range to Favor Topside Targets
  • Interim Resistance: 10,602 (38.2 retracement) to 10,615 (78.6 expansion)
  • Interim Support: 10,354 to 10,375 (50.0 retracement)

Release

GMT

Expected

Actual

Chicago Fed National Activity Index (APR)

12:30

0.00

-0.32

Initial Jobless Claims (MAY 17)

12:30

310K

326K

Continuing Claims (MAY 10)

12:30

2675K

2653K

Markit Purchasing Manager Index Manufacturing (MAY P)

13:45

55.5

56.2

Existing Home Sales (APR)

14:00

4.69M

4.65M

Existing Home Sales (MoM) (APR)

14:00

2.2%

1.3%

Leading Indicators (APR)

14:00

0.4%

0.4%

Kansas City Fed Manufacturing Activity (MAY)

15:00

7

10

Fed's John Williams Speaks on U.S. Economy

20:00

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--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

To be added to David's e-mail distribution list, please follow this link.

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22 May 2014 16:00 GMT