Talking Points:
- GBP/USD Retail Positioning at Extremes Following Failed Test of May Low (1.5088).
- AUD/USD Rebound Stalls at Former Support; Downside Targets in Focus Ahead of RBA Meeting.
- USDOLLAR Fails to Retain Opening Weekly Range as ISM Manufacturing Disappoints.
For more updates, sign up for David's e-mail distribution list.
Chart - Created Using FXCM Marketscope 2.0
- GBP/USD remains at risk for a further loss over the near to medium-term as the Relative Strength Index (RSI) retains the downward trend from back in May; need a break/close below 1.5088 (May low) to 1.5090 (61.8% retracement) to favor a further decline.
- However, with growing speculation for a greater dissent at the Bank of England’s (BoE) October 8 interest rate decision, may see GBP/USD consolidate ahead of the policy meeting amid the tightening race with the Federal Reserve to normalize monetary policy.
- DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-long GBP/USD since August 21, but the ratio is hitting recent extremes as it climbs to +3.11, with 76% of traders long.
AUD/USD
- AUD/USD struggles to retain the gains following positive data prints out of China – Australia’s largest trading partner – with the pair pulling back from former support around 0.7080 (38.2% expansion) to 0.7090 (78.6% retracement).
- Even though the Reserve Bank of Australia (RBA) is widely expected to keep the benchmark interest rate at 2.00% at the October 6 meeting, dovish language accompanied by a toughened verbal intervention on the local currency may spark a resumption of the long-term bearish trend for AUD/USD.
- As AUD/USD struggling to push back above former support, will continue to keep a close eye on the narrow range as the pair continues to close above 0.6950 (161.8% expansion) to 0.6970 (50% expansion).
Join DailyFX on Demand for Real-Time SSI Updates Across the Majors!
Read More:
Price & Time: USD/CAD Fails At Key Price & Percentage Symmetry
AUDNZD at Critical Inflection Point- Scalps Eye Weekly Opening Range
USDOLLAR(Ticker: USDollar):
| Index | Last | High | Low | Daily Change (%) | Daily Range (% of ATR) |
|---|---|---|---|---|---|
| DJ-FXCM Dollar Index | 12066.40 | 12082.08 | 12042.62 | -0.06 | 81.34% |
Chart - Created Using FXCM Marketscope 2.0
- The Dow Jones-FXCM U.S. Dollar slips to a fresh weekly low ahead of the Non-Farm Payrolls (NFP) report amid the ongoing mixed batch of data coming out of the U.S. economy; still waiting for a break of the bearish formation on the RSI to favor a resumption of the long-term bull trend.
- Will keep close eye on the fresh comments from San Francisco Fed President John Williams as he serves as a voting-member on the FOMC; will we see a growing dissent at the October 28 interest rate decision?
- Despite the failure to retain the weekly opening range, closing price above 12,082 (61.8% expansion) should favor a move into 12,162 (April high) to 12,176 (78.6% expansion).
Join DailyFX on Demand for Real-Time SSI Updates!
--- 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.
Trade Alongsidethe DailyFX Team on DailyFX on Demand
Looking to use the DailyFX Trade Signals LIVE? Check out Mirror Trader.
New to FX? Watch this Video
Join us to discuss the outlook for the major currencies on the DailyFXForums
