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
Mixed
Gold
Bullish
Oil - US Crude
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
Bitcoin
Mixed
More View more
Real Time News
  • The term ‘Ichimoku,’ literally means ‘one glance,’ in Japanese. Ichimoku, or the one glance indicator, is considered to be a self-contained system in the fact that no additional indicators are necessary. Learn more about the 'one glance' indicator here: https://t.co/T7o7W9C0Ro https://t.co/7bhBfWvEkR
  • 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/85JHunf2Xf
  • Many traders ask how a trading method that is 77 years old is applicable today. Learn about the Gartley pattern and see how you can incorporate it into your trading style here: https://t.co/2yPmGH0XvT https://t.co/rtqUKZSdn1
  • Recessions can devastate the economy and disrupt the fortunes of individuals, businesses, and investors. But economic decline in the business cycle is inevitable, and your trading can be defined by how you respond to crisis. learn how to prepare here: https://t.co/e4CnobJCss https://t.co/ywv7RVP9qY
  • Crude oil prices may rise on supply-disruption fears after the outcome of the Iran election, but sentiment from #coronavirus fears may derail Brent’s recovery ahead of the G20 summit. Get your crude #oil market update from @ZabelinDimitri here: https://t.co/83iTphwaWv #OOTT https://t.co/RgQku64XyW
  • The Australian Dollar remains severely weighed down by #coronavirus worries and a lack of domestic data points will probably keep that story in the driving seat. Get you $AUDUSD market update from @DavidCottleFX here: https://t.co/qswUnnXVwR https://t.co/NyZ0iEpILm
  • While Sino-US trade jitters are temporarily abating, China-Swedish trade tensions are rising as a part of a political contagion of growing economic hostilities between nations across the world. Get your market update from @ZabelinDimitri here:https://t.co/F1fVoyzoz5 https://t.co/uOLKRebXB1
  • #DidYouKnow the global trade volumes dropped by close to 10% amid the Great Recession. Want to know your #tradewars history? Get it here: https://t.co/f4loFVzX6w https://t.co/GDTFHvUIf7
  • The spread of #coronavirus promises a global economic hit at a time when the global economy is perhaps especially ill-equipped to deal with one. Growth-correlated assets are vulnerable. Get your market update from @DavidCottleFX here: https://t.co/0If0Jw7c2P https://t.co/mph6z70XeF
  • The $JPY continues to struggle against the US Dollar but there seems little appetite to push USD/JPY much beyond a range which has tended to reassert itself since late last year. Get your market update from @DavidCottleFX here: https://t.co/iaVfPSuXy4 https://t.co/1QPhJmYlQv
USD Pullback To Be Short-Lived, Sterling Weakness To Gather Pace

USD Pullback To Be Short-Lived, Sterling Weakness To Gather Pace

2011-10-18 15:42:00
David Song, Currency Strategist
Share:

DJ FXCM Dollar Index

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

9798.16

9812.53

9743.8

0.28

76.66%

USD_Pullback_To_Be_Short-Lived_Sterling_Weakness_To_Gather_Pace_body_ScreenShot027.png, USD Pullback To Be Short-Lived, Sterling Weakness To Gather Pace

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) remains 0.28 percent higher on the day after moving 77 percent of its average true range, and the rebound from 9,697 should gather pace as the gauge breaks out of the downward trending channel from earlier this month. In turn, the reserve currency should continue to retrace the sharp decline during the last two weeks, and the index should resume the advance carried over from back in August as the flight to safety gathers pace. However, as price action remains confined by the upper Bollinger Band around 9,810, we may see the greenback consolidate over the next 24-hours of trading, and the USD may fall back towards 9,760 before we see it continue to push higher.

USD_Pullback_To_Be_Short-Lived_Sterling_Weakness_To_Gather_Pace_body_ScreenShot028.png, USD Pullback To Be Short-Lived, Sterling Weakness To Gather Pace

As the USD struggles to push back above the 50.0% Fibonacci retracement around 9,828, the greenback may consolidate as we head into the middle of the week, but comments from Fed Chairman Ben Bernanke is likely to heavily influence the reserve currency as market participants weigh the prospects for future policy. Indeed, the central bank head is likely to maintain a highly dovish tone for monetary policy give the slowing recovery in the world’s largest economy, and Mr. Bernanke may show an increased willingness to conduct another round of quantitative easing in an effort to stem the downside risks for growth and inflation. In turn, increase speculation for QE3 may bear down on the exchange rate, and we may see the dollar index trend sideways ahead of the Fed’s Beige Book economic report as investors reassess the fundamental outlook for the U.S.

USD_Pullback_To_Be_Short-Lived_Sterling_Weakness_To_Gather_Pace_body_ScreenShot029.png, USD Pullback To Be Short-Lived, Sterling Weakness To Gather Pace

Two of the four components weakened against the greenback on Tuesday, led by a 0.66 percent decline in the British Pound, and the GBP/USD may continue to retrace the rebound from 1.5273 should the Bank of England keep the door open to expand the asset purchase program beyond the GBP 275B target. The BoE minutes are likely to highlight the ongoing weakness within the real economy, and the central bank may see a greater risk of undershooting the 2 percent for inflation as slowing recovery in the U.K. dampens the outlook for price growth. In turn, dovish comments coming out of the MPC is likely to weigh on the exchange rate, and the GBP/USD may trade heavy over the remainder of the week as market participants increased bets for more QE.

--- 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.