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
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
GBP/USD
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
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
Gold
Mixed
Oil - US Crude
Bullish
Bitcoin
Bearish
More View more
Real Time News
  • The $USD’s aggressive rise versus ASEAN currencies such as the Singapore Dollar, Indonesian Rupiah, Malaysian Ringgit and Philippine Peso prolonged. What is the technical road ahead? Find out from @ddubrovskyFX here:https://t.co/RsFptNzODf https://t.co/agMwRLV0rZ
  • RT @YuanTalks: #China confirmed 889 new cases of #coronavirus, taking the total number of confirmed cases to 75,465 as of Thursday and the…
  • RT @Rover829: Reuters: CHINA REPORTS 889 NEW CONFIRMED CASES OF CORONAVIRUS ON MAINLAND ON FEB 20 VS 394 ON FEB 19 (this means more than ha…
  • RT @globaltimesnews: #Coronavirus halts most China-Europe freight trains until mid-February: industry insiders. https://t.co/L6gdcnQqIl htt…
  • RT @RANsquawk: Japanese Jibun Bank Flash PMIs (Feb): - Manufacturing 47.6 (Prev. 48.8) - Services 46.7 (Prev. 51.0) - Composite 47.0 (Prev.…
  • Bank of Japan's Governor Kuroda: Consumption drop isn't fault of sales tax alone. Storms, unseasonable weather also hitting spending. Capex, govt. policies supporting moderate expansion -BBG
  • South Korea confirms 52 further cases of the #coronavirus , bringing total to 156 -BBG
  • Bank of Japan Governor Haruhiko Kuroda - Cannot measure impact of #coronavirus yet - Virus likely to hit supply chains, tourism and exports - Will take appropriate measures as necessary but doesn't believe policy measures are needed at this time (BBG)
  • When your girlfriend says she’s visiting the Fed for work: https://t.co/sZjs9aW3eJ
  • The $GBP recoiled from chart resistance against the US Dollar, setting the stage for prices to resume a bearish trend reversal triggered mid-January. Get your market update from @IlyaSpivak here:https://t.co/lVpyZkIfJt https://t.co/zCGq8Kpoqy
USD To Consolidate Ahead Of NFPs, Euro Outlook Remains Bearish

USD To Consolidate Ahead Of NFPs, Euro Outlook Remains Bearish

2011-10-06 17:00:00
David Song, Currency Strategist
Share:

DJ FXCM Dollar Index

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10001.82

10069.2

9979.69

-0.17

101.36%

USD_To_Consolidate_Ahead_Of_NFPs_Euro_Outlook_Remains_Bearish_body_ScreenShot043.png, USD To Consolidate Ahead Of NFPs, Euro Outlook Remains Bearish

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is 0.17% lower on the day after moving 102% of its average true range, and we may see the greenback fall back towards the lower Bollinger Band around 9971 as the shift in market sentiment gathers pace. In turn, the index may threaten the upward trend carried over from earlier this month, and the pullback may gather pace in the days ahead as the greenback appears to have carved out a near-term top just below 10,050. However, we may see the greenback consolidate ahead of the U.S. Non-Farm Payrolls report as the data is expected to show a protracted recovery in the labor market, and a dismal employment figure may weigh on trader sentiment as it dampens the outlook for future growth.

USD_To_Consolidate_Ahead_Of_NFPs_Euro_Outlook_Remains_Bearish_body_ScreenShot044.png, USD To Consolidate Ahead Of NFPs, Euro Outlook Remains Bearish

As the relative strength index falls back from overbought territory, we may see the reversal from10,134 accelerate, and the USD may fall back towards the 61.8% Fibonacci retracement around 9,947 to test for near-term support. However, the index may revert all the way back towards the 50.0% Fib around 9,828 should the rise in risk gather pace, but NFP’s may spur a shift in market sentiment as the data instills a weakened outlook for the world’s largest economy. Employment in the U.S. is expected to increase 55K in September after holding flat in the previous month, and the tepid pace of job growth is likely to weigh on risk-taking behavior as the outlook for future growth deteriorates. In turn, we may see the USD recoup the losses from earlier this week, and the index may face range-bound price action over the near-term as market participants see the Fed expanding monetary policy further over the coming months.

USD_To_Consolidate_Ahead_Of_NFPs_Euro_Outlook_Remains_Bearish_body_ScreenShot045.png, USD To Consolidate Ahead Of NFPs, Euro Outlook Remains Bearish

Three of the four components advanced against the greenback on Thursday, led by a 0.47% advance in the Euro, but the single-currency is likely to face additional headwinds over the near-term as the central bank continues to soften its hawkish tone for monetary policy. As the European Central Bank expands its nonstandard measures to shore up the financial system, it seems as though the Governing Council will also scale back the rate hikes from earlier this year in an effort to stimulate the ailing economy, and the ECB may carry its easing cycle into the following year as the region faces an increased risk of a double-dip recession. As the slowing recovery in Europe dampens the outlook for inflation, we are likely to see an increased reliance on the central bank to address the risks for the region, and speculation for additional monetary support continues to instill a bearish outlook for the single-currency as interest rate expectations falter. In turn, the rebound in the EUR/USD may be short-lived, and the exchange rate may make another run at the 38.2% Fibonacci retracement as the central bank casts a weakened outlook for the euro-area.

--- 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, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Join us to discuss the outlook for the major currencies on the DailyFX Forums

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

DISCLOSURES

News & Analysis at your fingertips.