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
Oil - US Crude
Bearish
Wall Street
Mixed
Gold
Bullish
GBP/USD
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
USD/JPY
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
More View more
Real Time News
  • Support and resistance are the cornerstone of technical analysis, making it the foundation that you build your knowledge on. Build a stronger foundation here: https://t.co/yXLaRpl90I https://t.co/MhP7opgk4a
  • Investors in stocks, commodity currencies and energy have been praying for a massive fiscal bazooka to combat the virus effects. It looks like they’re going to get it. Get your market update from @DavidCottleFX here:https://t.co/e2ciGSYftY https://t.co/Udoi5UMJrl
  • The ‘V-shaped’ recovery in USD/JPY just failed to hit its target and is now moving lower again. Important support is now being tested. Get your $USDJPY technical analysis from @nickcawley1 here: https://t.co/koiac0Rxvs https://t.co/CsVsS7PVMV
  • The Australian Dollar has been lifted from its multi-year lows by hopes that global financial authorities can fend off the worst of the #coronavirus‘ effects. Get your $AUDUSD market update from @DavidCottleFX here: https://t.co/GC5pwNbY9S https://t.co/OryobNq7uL
  • Before considering to enter a position, price action must come into contact with the upper or lower channel line at least three times. Learn how to validate a channel here: https://t.co/Rd5hDm7gRo https://t.co/mubPgmDRRY
  • A tidal wave of cash waits to return to virus-battered assets, backstopped by huge stimulus. It is unlikely to deploy until infection slows, whatever the US administration prefers. Get your market update from @DavidCottleFX here: https://t.co/OWOi2HxejD https://t.co/jvMXT7te1h
  • The bullish engulfing candle is one of the forex market’s most clear-cut price action signals for reversals and continuation. Learn more about this price action trading signal here: https://t.co/edEHzyoCJT https://t.co/vHPSW7Vm96
  • It was a big week for GBP/USD as Cable crushed shorts, rallying more than 1,000 pips off of last week’s lows. Get your $GBPUSD technical analysis from @JStanleyFX here: https://t.co/n6vYfe6Gfh https://t.co/zQq74Zzxsv
  • The bull flag pattern is a great pattern to add to a forex trader’s technical arsenal. Explosive moves are often associated with the bull flag. Learn more about the bull flag pattern here: https://t.co/ZNRBvNELeJ https://t.co/CKkWNMLkuw
  • The US Dollar could rise if key ISM, PMI and nonfarm payrolls data causes recession fears to swell and rekindles appetite for the haven-linked Greenback. Get your $USD market update from @ZabelinDimitri here: https://t.co/iTlnxWuSqn https://t.co/brEsDw2a5K
U.S. Dollar Poised For Correction, Sterling To Face Broad Range

U.S. Dollar Poised For Correction, Sterling To Face Broad Range

2011-08-24 15:53:00
David Song, Strategist
Share:

DJ FXCM Dollar Index

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

9480.09

9482.42

9421.69

0.51

62.30%

U.S._Dollar_Poised_For_Correction_Sterling_To_Face_Broad_Range_body_ScreenShot007.png, U.S. Dollar Poised For Correction, Sterling To Face Broad Range

The greenback pared the decline from earlier this week and the reserve currency may continue to consolidate in the days ahead as the Jackson Hole Economic Policy Symposium takes center stage. The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is 0.51% higher from the open after moving 62% of its average true range, and the rebound may gather pace over the next 24-hours of trading as the greenback threatens the descending triangle formation. However, as the relative strength index approaches overbought territory, we could see the USD consolidate over the next 24-hours of trading, and the greenback could face a sharp selloff as price action approaches the apex. As the economic docket remains fairly light for the next 24-hours of trading, market sentiment should dictate price action for the major currencies, and the rebound in risk aversion may gather pace as the uncertainties surrounding the global economy weighs on investor confidence.

U.S._Dollar_Poised_For_Correction_Sterling_To_Face_Broad_Range_body_ScreenShot006.png, U.S. Dollar Poised For Correction, Sterling To Face Broad Range

As the USD trades within the previous day’s range, the index may trend sideways in the days ahead, but comments from Fed Chairman Ben Bernanke is likely to heavily influence the reserve currency as market participants weigh the outlook for monetary policy. Although there’s speculation that the central bank head will hint at another round of quantitative easing, we see a very slim chance for QE3 given the dissent views within the Federal Open Market Committee. In turn, we expect Mr. Bernanke to elaborate of the details of the recent decision announced by the committee, and the lack of assurance for additional monetary stimulus is likely to bear down on market sentiment as the Fed continues to endorse a wait-and-see approach. Should the comments spur a flight to safety, currency traders may flood into the reserve currency, and the U.S. dollar may recoup the losses from earlier this month as it benefits from safe-haven flows.

U.S._Dollar_Poised_For_Correction_Sterling_To_Face_Broad_Range_body_ScreenShot008.png, U.S. Dollar Poised For Correction, Sterling To Face Broad Range

All four components weakened against the greenback on Wednesday, led by a 0.73% decline in the British Pound, and the sterling may face additional headwinds over the near-term as market participants speculate the Bank of England to expand its asset purchase program beyond the GBP200B target. As the U.K. faces a slowing recovery, the BoE may see an increased risk of the economy falling back into a recession, and the central bank may show an increased willingness to expand monetary policy further as Governor Mervyn King sees a risk of undershooting the 2% target for inflation. In turn, the GBP/USD may continue to give back the advance from earlier this month, and the exchange rate may trade within a broad range as the fundamental outlook for Britain remains clouded with high uncertainty.

Join us to discuss the outlook for the major currencies on the DailyFXForums

To discuss this report contact David Song, Currency Analyst: dsong@dailyfx.com

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

DISCLOSURES

News & Analysis at your fingertips.