News & Analysis at your fingertips.

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. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • 🇺🇸 Durable Goods Orders Ex Transp MoM (JUN) Actual: 0.3% Expected: 0.8% Previous: 0.5% https://www.dailyfx.com/economic-calendar#2021-07-27
  • 🇺🇸 Durable Goods Orders MoM (JUN) Actual: 0.8% Expected: 2.1% Previous: 3.2% https://www.dailyfx.com/economic-calendar#2021-07-27
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here: https://t.co/SQUCCYRCIk https://t.co/R5AhyIdB5r
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 93.32%, while traders in Wall Street are at opposite extremes with 75.28%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/XBVb5ARDM1
  • Heads Up:🇦🇺 RBA Debelle Speech due at 12:35 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-07-27
  • Forex Update: As of 12:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.29% 🇨🇭CHF: 0.09% 🇪🇺EUR: 0.05% 🇨🇦CAD: -0.18% 🇦🇺AUD: -0.20% 🇳🇿NZD: -0.51% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/rSpNjl4PKY
  • Heads Up:🇺🇸 Durable Goods Orders Ex Transp MoM (JUN) due at 12:30 GMT (15min) Expected: 0.8% Previous: 0.3% https://www.dailyfx.com/economic-calendar#2021-07-27
  • Heads Up:🇺🇸 Durable Goods Orders MoM (JUN) due at 12:30 GMT (15min) Expected: 2.1% Previous: 2.3% https://www.dailyfx.com/economic-calendar#2021-07-27
  • Ever wonder if there are other chart types that can be sued for technical analysis? HLOC charts are discussed in the following article as well as their pros and cons. Learn more here: https://t.co/qV3c7a4YR3 https://t.co/GUXDEf3iJr
  • 🇲🇽 Balance of Trade (JUN) Actual: $0.76B Expected: $1.7B Previous: $0.34B https://www.dailyfx.com/economic-calendar#2021-07-27
USD Remains Clouded With Mixed Signals, Aussie Weakness To Accelerate

USD Remains Clouded With Mixed Signals, Aussie Weakness To Accelerate

David Song, Strategist

DJ FXCM Dollar Index

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10004.29

10039.97

9984.57

-0.05

85.69%

USD_Remains_Clouded_With_Mixed_Signals_Aussie_Weakness_To_Accelerate_body_ScreenShot054.png, USD Remains Clouded With Mixed Signals, Aussie Weakness To Accelerate

Although the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) remains 0.05 percent lower on the day, the rebound in risk-taking behavior appears to be tapering off as the sovereign debt crisis continues to drag on investor confidence. As the 30-minute relative strength index bounces back from a low of 31, the rebound in the index looks poised to gather pace over the next 24-hours of trading, and we may see the reserve currency continue to recoup the losses from the previous month as the developments coming out of the world’s largest economy dampens the scope for another large-scale asset purchase program. However, the pullback from 10,039 may turn into a broad-based correction as the index breaks out of the upward trending channel, and the USD may consolidate over the coming days as market participants weigh the prospects for future policy.

USD_Remains_Clouded_With_Mixed_Signals_Aussie_Weakness_To_Accelerate_body_ScreenShot055.png, USD Remains Clouded With Mixed Signals, Aussie Weakness To Accelerate

Indeed, we are still keeping a close eye on the bearish RSI divergence, but it seems as though we could still get another run at the 78.6 percent Fibonacci retracement (10,117) as the index continues to mark higher lows. In order to see a bullish breakout in the USD, we will need to see the Federal Reserve further soften its dovish tone for monetary policy, but Chairman Ben Bernanke may keep the door open to expand monetary policy further in an effort to shield the U.S. banking sector from the ongoing turmoil in the world financial system. As European policy makers struggle to stem the heightening risk for contagion, the FOMC may extend its easing cycle to shore up the economy, and the committee may show an increased willingness to expand its balance sheet further as the fundamental outlook for the globe remains clouded with high uncertainty. However, the more robust recovery could spur a rift within the Board of Governors as the recent developments raises the outlook for growth and inflation, and a growing number of Fed officials may argue against QE3 as the economy skirts a double-dip recession.

USD_Remains_Clouded_With_Mixed_Signals_Aussie_Weakness_To_Accelerate_body_ScreenShot056.png, USD Remains Clouded With Mixed Signals, Aussie Weakness To Accelerate

Three of the four components advanced against the greenback, led by a 0.17 percent rally in the Euro, while the Australian dollar slipped 0.15 percent as the isle-nation’s retail sales report fell short of market expectations. As the slowdown in global trade dampens the outlook for Australia, market participants expect to see further rate cuts in 2012, and the recent weakness in the high-yielding currency looks poised to gather pace as the fundamental outlook for the region turns increasingly bleak. According to Credit Suisse overnight index swaps, market participants are looking to a 25bp rate cut at the next rate decision scheduled for February 6, but see borrowing costs falling by 100bp over the next 12-months as the RBA curbs its fundamental assessment for the region. As the AUD/USD remains capped by the 200-Day SMA (1.0417), we should see the exchange rate give back the rebound from back in November (0.9663), and the pair may fall back towards the 50.0 percent Fib from the 2010 low to the 2011 high around 0.9570-0.9600 to test for near-term support.

--- 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