Talking Points:
- EUR/USD Fails to Retain Opening Monthly-Low; Risks Further Decline Ahead of ECB.
- USD/CAD Rebound to Accelerate Ahead of BoC on Dismal Canada Employment Report.
- USDOLLAR Threatens Bearish RSI Momentum; FOMC Minutes in Focus.
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Chart - Created Using FXCM Marketscope 2.0
- Failure to hold above 1.0700-10 (23.6% retracement) highlights the risk for a further decline in the exchange rate and may continue to give back the rebound from the March low (1.0461) especially as the Relative Strength Index (RSI) fails to preserve the bullish momentum carried over from the previous month.
- Despite the positive headlines coming out of Greece, the European Central Bank’s (ECB) April 15 policy meeting may dampen the bearish sentiment surrounding the single-currency should President Mario Draghi sound increasly upbeat this time around and talk down bets for more non-standard measures.
- DailyFX Speculative Sentiment Index (SSI) shows the retail FX crowd remains net-short EUR/USD ahead of the ECB, but market participation appears to be slowing waning going into the weekend as the ratio narrows to -1.28, while open interest has narrowed 1.7% from the previous day.
USD/CAD
- Will continue to favor a ‘buying-dips’ approach for USD/CAD as the pair continues to come off of near-term support around 1.2390 (161.8% expansion) to 1.2420 (161.8% expansion); waiting for a break of the bearish RSI momentum to favor a further advance.
- With Canada expected to show zero job growth in March, a dismal data print may dampen the economic outlook and encourage the Bank of Canada (BoC) to endorse a more dovish tone for monetary policy at its April 15 interest rate decision.
- Key topside region of interest continues to stand at 1.2800-10 (38.2% expansion).
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Read More:
Price & Time: USD/CAD Continues to Tease
Heavily One-Sided Sentiment Points to British Pound Weakness
USDOLLAR(Ticker: USDollar):
| Index | Last | High | Low | Daily Change (%) | Daily Range (% of ATR) |
|---|---|---|---|---|---|
| DJ-FXCM Dollar Index | 12077.93 | 12080.66 | 12019.97 | 0.38 | 70.66% |
Chart - Created Using FXCM Marketscope 2.0
- Despite the mixed batch of data coming out of the U.S. economy, may see a larger advance materialize in the Dow Jones-FXCM U.S. Dollar as it threatens the wedge/triangle formation, while the RSI appears to be breaking out of the bearish formation.
- Federal Open Market Committee (FOMC) Minutes suggests the bar remains high for a mid-2015 rate hike as central bank officials struggle to meet on common ground; will keep a close eye on Retail Sales due up next week as private-sector consumption remains one of the leading drivers for growth and inflation in the U.S.
- As the bullish formation remains intact, break/close above 12,082 (61.8% expansion) may heighten the risk for fresh 2015 highs in the USDOLLAR, with the next key region of interest around 12,176 (78.6% expansion).Join DailyFX on Demand for Real-Time SSI Updates!
| Release | GMT | Expected | Actual |
|---|---|---|---|
| Initial Jobless Claims (APR 4) | 12:30 | 283K | |
| Continuing Claims (MAR 28) | 12:30 | 2350K | |
| Wholesale Inventories (MoM) (FEB) | 14:00 | 0.2% | |
| Wholesale Trade Sales (MoM) (FEB) | 14:00 | 0.3% |
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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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