Talking Points:
- USDOLLAR Index candlesticks warn of near-term top.
- AUD/USD breaking through key resistance, NZD/USD firms ahead of RBNZ.
- August is typically a bad month for risk and a good month for the US Dollar - see the August forex seasonality report.
A miss on US productivity figures and a slight downtick to the Atlanta Fed's GDPNow growth tracking index yesterday, in lieu of other significant data, has market participants backing away from the greenback midweek. Small advances by AUD/USD and EUR/USD have the USDOLLAR Index trading about half a percent lower at the time of writing, and amid another absent calendar, there seems to be little to get in the way of further gradual movement in price ahead of the Reserve Bank of New Zealand rate decision later today.
Regarding the broader USDOLLAR Index, even though this is a low volume, low newsflow week thus far, that doesn't mean significant technical developments can't be made. As such, yesterday's bearish key reversal at the August highs portends to weakness in the coming sessions; we're certainly seeing follow through thus far today. One such place to watch for US Dollar weakness is USD/JPY, which just saw a rejection of the support trendline from the post-Brexit lows.
See the video (above) for technical considerations in EUR/USD, GBP/USD, USD/CAD, AUD/USD, USD/JPY, NZD/USD, and the USDOLLAR Index.
Read more: AUD/USD Nears Key Resistance, GBP/USD Triangle Breakdown Continues
--- Written by Christopher Vecchio, Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
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