We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • #USDCHF pivot points (daily) – S3: 0.9819, S2: 0.9853, S1: 0.9866, R1: 0.9901, R2: 0.9922, R3: 0.9957- https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • The #Euro snapped downward to overturn a would-be bullish breakout, signaling that sellers have reclaimed the initiative. Will they follow through this time? Get your market update from @IlyaSpivak here:https://t.co/RdAMU0QFYu https://t.co/inKMNJuyj5
  • En español: ¿Qué es el DAX 30? Guía del trader sobre el #DAX30 #GER30 #trading https://t.co/5ERZBPd4hf https://t.co/00FPI76keU
  • Lowe: Weakness in consumption growth was GDP surprise $AUDUSD
  • ...and despite the surge in volatility last week (over 55% jump from the Nov 26 low to Dec 3 high), the net speculative short futures position barely budged https://t.co/or2EZnslUc
  • Lowe: Confident consumers will spend more, but many people have high debt so spending takes longer $AUD
  • RBA's Lowe: GDP outcome was broadly in line with expectations $AUDUSD
  • The $VIX went through a wild ride this past session. Looks like there is far more uncertainty under the surface than what the SPX itself is showing https://t.co/zDiCZMc12q
  • RT @Fxhedgers: "U.S tariffs on Chinese imports still scheduled to go on Dec 15th, China is preparing for those tariffs to go active." : tra…
  • $AUDJPY may be breaking under a Rising Wedge. Still plenty of event risk this week to drive price action for the sentiment-linked pair (#Fed, #tradewars, #UKelection2019, and more). A daily close under 73.36 could pave the way to revisit October lows - https://www.dailyfx.com/forex/analyst_picks/todays_picks/daniel_dubrovsky/2019/11/07/FX-Trading-Setups-in-AUDJPY-On-US-China-Trade-Talk-Outcomes.html?CHID=9&QPID=917702 https://t.co/EPUOuSqy6V
Dollar Looks to Fed to Secure Strongest Run in Half a Century

Dollar Looks to Fed to Secure Strongest Run in Half a Century

2014-09-12 04:38:00
John Kicklighter, Chief Currency Strategist
Share:

Talking Points:

  • Dollar Looks to Fed to Secure Strongest Run in Half a Century
  • British Pound Edges Higher as Market Digests Shift in Scotland Sentiment
  • Euro Focus Still on ECB Policy, But Sovereign Bond Yields are Rising…

Dollar Looks to Fed to Secure Strongest Run in Half a Century

Friday is opening once again green for the Dow Jones FXCM Dollar Index (ticker = USDollar). If we close out the session positive, it would mark the fifth consecutive daily advance – matching the currency’s best performance since February. Furthermore, baring a sharp drop before the week closes, we are going to close an even more incredible record for the dollar: the ninth consecutive weekly gain. For the ICE Dollar Index, that matches the longest bull series on records going back nearly 50 years (there were comparable runs in 1997, 1979 and 1975). In other words, the US currency has enjoyed an incredible level of strength. Yet, in a financial system where complacency and comfort dominate; such a move is an affront to established market conditions. Either currency or broader sentiment must yield.

Given the shift in the dollar’s position and fundamentals, the rise in FX-based volatility measures and the event risk ahead; we may very well find the system is more prone to change than the errant currency. Whether Dollar or FX trader, appreciation of the rapid increase in implied (expected) volatility measures is warranted. It has been particularly pronounced in the shorter-term, currency-based arena. That certainly has a lot to do with the high-level event risk we face next week including the FOMC rate decision. However, we find that the turn in activity FX activity measures is consistent over longer durations, and the sentiment is spreading to other asset classes. Is the seasonal transition from ‘Summer Lull’ conditions finally stirring historically temperate markets? Is the fire beginning in the currency realm?

To determine the next leg of the greenback’s course – and certainly to change the current of the general financial system – elemental changes and event risk are necessary. On that front, few known events carry as much weight as Wednesday’s FOMC decision. Beyond just the penultimate Taper, this event will offer updated forecasts and Chairwoman Janet Yellen’s press conference. In this event, there is heavy volatility potential. While the currency’s gains and some surveys insinuate a market that is more certain of a hawkish path, Fed Funds futures and market-wide speculative positioning show a deeper sense of blissful ignorance. A path towards tighter policy will eventually turn the tides.

British Pound Edges Higher as Market Digests Shift in Scotland Sentiment

It was a YouGov opinion poll gauging Scots’ position on the impending referendum vote this past weekend that prompted GBPUSD to gap sharply lower Monday. A 51 percent support for independence from the UK suddenly thrust an expected low-probability event to the top of the list of concerns. Noting the lack of appreciation they initially paid this event, it comes as little surprise that the sterling found limited lift on an updated survey from the same group that showed a shift to the ‘No’ camp by the same margin. The vote on September 18 (Thursday) stands as a top event risk for the pound as the implications are not clear. However, also keep an eye on BoE rate forecasts with UK CPI on Tuesday.

Euro Focus Still on ECB Policy, But Sovereign Bond Yields are Rising…

The projected ballooning of Euro-area monetary policy is certainly turning the screws on the markets. The three-month Euribor rate has dropped to a record low below 0.09 percent and the Euro has collapsed 7.7 percent in four months against a dollar that is still under the influence of QE3. And, much of this has been in anticipation. While the ECB has cut rates, it has yet to increase its balance sheet. That begins next Thursday when the bank allots its first Targeted-LTRO. This tangible stimulus move still has influence to exact, however, we shouldn’t forget there are other forces at play. A rise in Eurozone sovereign bond yields and a retreat in foreign interest in Eurozone capital markets is concerning.

Japanese Yen: Will This USDJPY Rally Hit 110?

USDJPY targets keep rising as the pair extends its incredible run. Yet, momentum is not as easy to maintain to 110 and beyond as many may appreciate. The first obstacle to this pair’s progress is the known event risk for the dollar. While the Fed decision could certainly drive the greenback higher on a hawkish upgrade; that is a necessary outcome to that must be realized to fulfill current expectations. A hawkish Fed could also spur risk aversion. And, BoJ Governor Kuroda repeating the ‘no need for more QE’ stance, there is little to stop an inflated carry unwind.

Australian Dollar Rallies on Strong Jobs, Retreats When Realized they Were Part-Time

It is important to appreciate that data does not have a black-and-white impact on the markets. That is because its implications are interpreted by a group with biases and different analyses. Case-in-point was the Aussie August jobs figures. What was originally a rally on a 121,000-net increase in jobs turned into a complete reversal when the market realized the bulk was part-time jobs.

Emerging Markets at Critical Juncture in Bull Trend as Investors Contemplate Fed Tightening

Technical traders are watching the MSCI Emerging Market ETF closely. Having dropped back 3.5 percent from its multi-year high set this past Friday, the index has experienced a swell in volatility into the backbone of the 8-month advance. Hold or collapse has more to do with underlying fundamentals than stops and entries. Is the Fed soon to start withdrawing the liquidity that has lowered volatility and encouraged yield reach?

Gold Creeps into 8-Month Lows, Volatility on the Rise

While gold isn’t on fire, it is still melting lower. The metal has continued to drop through the morning hours Friday to push us to levels not seen since January. This consistent decline is developing alongside rising volume in the speculative futures and ETFs exposures. Meanwhile, the CBOE’s Gold Volatility Index has forged ahead to 5-month highs. What will central bank speculation do to the metal next week…

**Bring the economic calendar to your charts with the DailyFX News App.

ECONOMIC DATA

GMT

Currency

Release

Survey

Previous

Comments

22:30

NZD

Business NZ Performance of Manufacturing Index

53.5

22:45

NZD

Food Prices (MoM)

-0.70%

Gives RBNZ one way of looking at price increases

1:30

AUD

Credit Card Balances

$A49.9B

These two measures grow with the economy.

1:30

AUD

Credit Card Purchases

$A23.1B

4:30

JPY

Industrial Production (MoM)

0.20%

These are from the month of July F

4:30

JPY

Industrial Production (YoY)

-0.90%

4:30

JPY

Capacity Utilization (MoM)

-3.30%

6:00

EUR

German Wholesale Price Index (MoM)

0.10%

Gives the ECB one way of measuring the inflation of the largest economy in the Eurozone

6:00

EUR

German Wholesale Price Index (YoY)

0.50%

8:30

GBP

Construction Output SA (YoY)

3.20%

5.30%

Improved construction performance can put pressure on BoE to increase rates

8:30

GBP

Construction Output SA (MoM)

0.60%

1.20%

9:00

EUR

Euro-Zone Industrial Production s.a. (MoM)

0.70%

-0.30%

Indicator of how manufacturing is performing; however, these measure for July

9:00

EUR

Euro-Zone Industrial Production w.d.a. (YoY)

1.40%

0.00%

9:00

EUR

Euro-Zone Employment (QoQ)

0.10%

Monetary policy decisions are dictated by the employment situation

9:00

EUR

Euro-Zone Employment (YoY)

0.20%

12:30

USD

Advance Retail Sales

0.60%

0.00%

Can indicate how strong the consumption is in the economy; however the measures are volatile

12:30

USD

Retail Sales Less Autos

0.30%

0.10%

12:30

USD

Retail Sales Ex Auto and Gas

0.40%

0.10%

12:30

USD

Retail Sales Control Group

0.50%

0.10%

12:30

USD

Import Price Index (MoM)

-1.00%

-0.20%

Important as it contributes to the general CPI

12:30

USD

Import Price Index (YoY)

-0.40%

0.80%

13:00

CAD

Teranet/National Bank HPI (MoM)

1.10%

House prices are important to the BoC rate decision as rate changes can change the cost of mortgages

13:00

CAD

Teranet/National Bank HPI (YoY)

4.90%

13:00

CAD

Teranet/National Bank HP Index

165.84

13:55

USD

U. of Michigan Confidence

83.3

82.5

Improved confidence can interest rate increases more likely

14:00

USD

Business Inventories

0.40%

0.40%

GMT

Currency

Upcoming Events & Speeches

6:05

JPY

BOJ Governor Kuroda Speech

SUPPORT AND RESISTANCE LEVELS

To see updated SUPPORT AND RESISTANCE LEVELS for the Majors, visit Technical Analysis Portal

To see updated PIVOT POINT LEVELS for the Majors and Crosses, visit our Pivot Point Table

CLASSIC SUPPORT AND RESISTANCE

EMERGING MARKETS 18:00 GMT

SCANDIES CURRENCIES 18:00 GMT

Currency

USD/MXN

USD/TRY

USD/ZAR

USD/HKD

USD/SGD

Currency

USD/SEK

USD/DKK

USD/NOK

Resist 2

13.5800

2.3800

12.7000

7.8165

1.3650

Resist 2

7.5800

5.8950

6.5135

Resist 1

13.3250

2.3000

11.8750

7.8075

1.3250

Resist 1

7.3285

5.8475

6.3145

Spot

13.1524

2.1625

10.7255

7.7502

1.2554

Spot

7.0676

5.7562

6.2669

Support 1

12.8350

2.0700

10.2500

7.7490

1.2000

Support 1

6.7750

5.3350

5.7450

Support 2

12.6000

1.7500

9.3700

7.7450

1.1800

Support 2

6.0800

5.2715

5.5655

INTRA-DAY PROBABILITY BANDS 18:00 GMT

\CCY

EUR/USD

GBP/USD

USD/JPY

USD/CHF

USD/CAD

AUD/USD

NZD/USD

EUR/JPY

Gold

Res 3

1.3026

1.6421

106.13

0.9394

1.0948

0.9406

0.8352

137.23

173.13

Res 2

1.3003

1.6393

105.94

0.9376

1.0932

0.9390

0.8335

136.99

172.81

Res 1

1.2980

1.6365

105.75

0.9359

1.0915

0.9374

0.8319

136.75

172.48

Spot

1.2934

1.6309

105.36

0.9324

1.0882

0.9341

0.8285

136.28

171.83

Supp 1

1.2888

1.6253

104.97

0.9289

1.0849

0.9308

0.8251

135.81

171.19

Supp 2

1.2865

1.6225

104.78

0.9272

1.0832

0.9292

0.8235

135.57

170.86

Supp 3

1.2842

1.6197

104.59

0.9254

1.0816

0.9276

0.8218

135.33

170.54

v

--- Written by: John Kicklighter, Chief Strategist for DailyFX.com

To contact John, email jkicklighter@dailyfx.com. Follow me on twitter at http://www.twitter.com/JohnKicklighter

Sign up for John’s email distribution list, here.

The information contained herein is derived from sources we believe to be reliable, but of which we have not independently verified. Forex Capital Markets, L.L.C.® assumes no responsibility for errors, inaccuracies or omissions in these materials, nor shall it be liable for damages arising out of any person’s reliance upon this information. Forex Capital Markets, L.L.C.® does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. Forex Capital Markets, L.L.C.® shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation losses, lost revenues, or lost profits that may result from these materials. Opinions and estimates constitute our judgment and are subject to change without notice. Past performance is not indicative of future results.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.