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
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here: https://t.co/8A1QhwMVKo https://t.co/Lxp7fJaM8Q
  • (ASEAN Tech) US Dollar Climbs Post FOMC. USD/SGD, USD/THB, USD/PHP, USD/IDR in Focus #USD $USDSGD $USDTHB $USDPHP $USDIDR #ASEAN https://www.dailyfx.com/forex/technical/article/special_report/2021/09/23/US-Dollar-Climbs-Post-FOMC-USDSGD-USDTHB-USDPHP-USDIDR-in-Focus.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/xcp3hdGaXe
  • 🇳🇱 GDP Growth Rate QoQ Final (Q2) Actual: 3.8% Expected: 3.1% Previous: -0.8% https://www.dailyfx.com/economic-calendar#2021-09-23
  • 🇳🇱 GDP Growth Rate YoY Final (Q2) Actual: 10.4% Expected: 9.7% Previous: -2.4% https://www.dailyfx.com/economic-calendar#2021-09-23
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePTpzSI https://t.co/9xP8YlxWSv
  • Heads Up:🇳🇱 GDP Growth Rate QoQ Final (Q2) due at 04:30 GMT (15min) Expected: 3.1% Previous: -0.8% https://www.dailyfx.com/economic-calendar#2021-09-23
  • Heads Up:🇳🇱 GDP Growth Rate YoY Final (Q2) due at 04:30 GMT (15min) Expected: 9.7% Previous: -2.4% https://www.dailyfx.com/economic-calendar#2021-09-23
  • Heads Up:🇹🇭 Balance of Trade (AUG) due at 03:30 GMT (15min) Expected: $0.97B Previous: $0.18B https://www.dailyfx.com/economic-calendar#2021-09-23
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/TzoInyMAQR
  • Evergrande shares jump as much as 32%, with over 240 million shares traded -BBG
USD Index Looks To March Highs Ahead Of NFPs, AUD Weakness Ahead

USD Index Looks To March Highs Ahead Of NFPs, AUD Weakness Ahead

David Song, Strategist

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10031.8

10048.07

9998.2

0.10

74.45%

USD_Index_Looks_To_March_Highs_Ahead_Of_NFPs_AUD_Weakness_Ahead_body_ScreenShot113.png, USD Index Looks To March Highs Ahead Of NFPs, AUD Weakness Ahead

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is 10 percent higher from the open after moving 75 percent of its average true range, and we may see the greenback appreciate further over the next 24-hours of trading as market participants scale back their appetite for risk. As the flight to safety spurs increased demands for the reserve currency, the dollar may make a run at the March high (10,097), but we may see a short-term correction as the relative strength index falls back from overbought territory.

USD_Index_Looks_To_March_Highs_Ahead_Of_NFPs_AUD_Weakness_Ahead_body_ScreenShot114.png, USD Index Looks To March Highs Ahead Of NFPs, AUD Weakness Ahead

As NFPs take center stage, we’re expecting to see 205K rise in employment, and the ongoing improvement in the U.S. labor should help to prop up the greenback as it dampens speculation for additional monetary support. Indeed, St. Louis Fed President James Bullard endorsed a wait-and-see approach amid the more robust recovery, and warned that ‘additional policy actions may create an over-commitment to ultra-easy monetary policy’ while delivering a speech earlier today. In light of the recent rhetoric from Fed officials, it seems as though the central bank is looking to conclude its easing cycle this year, and the FOMC may pave the way to start normalizing monetary policy towards the end of 2012 as the recovery gets on a more sustainable path. As the USDOLLAR preserves the upward trending channel from earlier this year, we anticipate to see another run at the 78.6 percent Fibonacci retracement around 10,118, and the bullish sentiment underlining the reserve currency should continue to gather pace as the Fed softens its dovish tone for monetary policy.

USD_Index_Looks_To_March_Highs_Ahead_Of_NFPs_AUD_Weakness_Ahead_body_ScreenShot115.png, USD Index Looks To March Highs Ahead Of NFPs, AUD Weakness Ahead

Two of the four components lost ground against the greenback on Thursday, driven by a 0.60 percent decline in the Euro, while the Australian dollar advanced 0.38 against its U.S. counterpart. As the AUDUSD bounces back from the monthly low (1.0242), we may see the pair revert back towards former support around the 200-Day SMA (1.0396), but we maintain a bearish outlook for the exchange rate as it maintains the downward trending channel from March. It seems as though we’re seeing a short-term correction as the relative strength index holds the downward trend from back in February, and the pair may looks poised to give back the advance from earlier this year as interest rate expectations falter. According to Credit Suisse overnight index swaps, market participants are looking for more than 75bp worth of rate cuts over the next 12-months, and we may see currency traders turn increasingly bearish against the high-yielding currency as the fundamental outlook for the $1T economy deteriorates.

--- 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