Talking Points:
- EUR/USD Threatens Monthly Opening Range Ahead of EU Court Ruling on ECB’s OMT Program.
- GBP/USD Range in Focus as BoE Governor Mark Carney Continues to See Higher Interest Rates.
- USDOLLAR Vulnerable to Larger Correction on Dismal Retail Sales Report.
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Chart - Created Using FXCM Marketscope 2.0
- EUR/USD remains at risk for a further decline as it threatens monthly opening range, while the Relative Strength Index (RSI) continues to hold in oversold territory.
- However, may see a relief rally as the European Court of Justice is expected to rule in favor of the European Central Bank’s Outright Monetary Transactions (OMT) program.
- Seeing increased volatility in the DailyFX Speculative Sentiment Index (SSI) as retail crowd flipped back to net-long EUR/USD on January 13, with the ratio currently standing at +1.39.
GBP/USD
- Despite the marked slowdown in the Consumer Price Index (CPI), GBP/USD remains at risk for a larger correction as Bank of England (BoE) Governor Mark Carney continues to see higher borrowing-costs in the U.K., while the RSI comes off of oversold territory.
- Nevertheless, long-term outlook remains bearish as GBP/USD continues to operate within the downward trending channel carried over from back in June; will watch former support zones for new resistance.
- Next topside level of interest for GBP/USD comes in around 1.5300 (23.6% retracement) to 1.5320 (78.6% retracement).
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USDOLLAR(Ticker: USDollar):
| Index | Last | High | Low | Daily Change (%) | Daily Range (% of ATR) |
|---|---|---|---|---|---|
| DJ-FXCM Dollar Index | 11646.86 | 11678.14 | 11611.31 | 0.10 | 151.16% |
Chart - Created Using FXCM Marketscope 2.0
- Dow Jones-FXCM U.S. Dollar struggling to hold its ground despite the slew of better-than-expected confidence surveys; may face sideways price action amid the string of closes above 11,623 (100% expansion).
- However, a decline in U.S. Retail Sales may dampen the appeal of the greenback & drag on interest rate expectations especially with the 2015 rotation within the Federal Open Market Committee (FOMC).
- Will continue to watch the near-term range as USDOLLAR remains capped around 11,721 (38.2% expansion).
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| Release | GMT | Expected | Actual |
|---|---|---|---|
| NFIB Small Business Optimism Survey (DEC) | 14:00 | 98.5 | 100.4 |
| IBD/TIPP Economic Optimism (JAN) | 15:00 | 48.7 | 51.5 |
| JOLTS Job Openings (NOV) | 15:00 | 4850 | 4972 |
| Monthly Budget Statement (DEC) | 19:00 | $3.0B | -- |
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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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