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.

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
EUR/USD
Bullish
Oil - US Crude
Bearish
Wall Street
Mixed
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Silver: 2.37% Gold: 0.91% Oil - US Crude: -0.03% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/OcKlpGbJvJ
  • #Gold Price Outlook: $XAUUSD Pops, Resistance at Prior Support - https://t.co/ZMukXQfl3z https://t.co/ApjvP4xb1F
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.19%, while traders in EUR/USD are at opposite extremes with 61.70%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/2yhFXRJBjw
  • Micron Q4 2020 Earnings: Revenue: $6.06B vs $5.90B exp EPS: $1.08 vs $0.99 exp Guides Q1 revenue $5B to $5.4B vs $5.33B exp $MU shares just 1% higher in after-hours trading
  • Regeneron reports positive data for its Covid-19 antibody drug, saying it helped reduce viral levels and improved symptoms faster, according to CNBC
  • today's webinar has been archived and is ready to go https://www.dailyfx.com/forex/video/live_events/2020/09/29/us-dollar-price-action-setups-eur-usd-aud-usd-gbp-usd.html
  • Indices Update: As of 20:00, these are your best and worst performers based on the London trading schedule: US 500: 0.03% Wall Street: 0.02% Germany 30: 0.02% France 40: -0.07% FTSE 100: -0.11% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/BPGABPy6pD
  • Gold price decline from triangle has room to 1800-area. Get your $XAUUSD market update from @PaulRobinsonFX here: https://t.co/bK4bo43DXw https://t.co/UVMGMAAkS3
  • Commodities Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Silver: 2.95% Gold: 0.84% Oil - US Crude: -0.06% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/FPnLbC3Pxf
  • With Eurozone economic data shrugging in recent weeks, European Central Bank interest rate expectations have been creeping forward towards April 2021. Get your $EURUSD market update from @CVecchioFX here: https://t.co/vBPciSW5pH https://t.co/qubKMRFnjv
USD Correction on Horizon, GBP to Take Cues from BoE Inflation Report

USD Correction on Horizon, GBP to Take Cues from BoE Inflation Report

2012-08-07 15:15:00
David Song, Strategist
Share:

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10000.8

10012.31

9981.97

0.01

51.12%

USD_Correction_on_Horizon_GBP_Outlook_Hinges_on_BoE_Inflation_Report_body_ScreenShot053.png, USD Correction on Horizon, GBP to Take Cues from BoE Inflation Report

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is little changed after moving 51 percent of its average true range, but there appears to be a bullish divergence in the 30-minute relative strength index as it continues to come off of oversold territory. If the pattern take shape over the next 24-hours of trading, the rebound from 9,981 should gather pace going into the middle of the week, which could spark another run at the 10,100 figure. However, as the economic docket for the U.S. remains fairly light over the remainder of the week, we should see risk trends continue to dictate price action for the greenback, and the rise in market sentiment may pick up in the days ahead as European policy makers increase their pledge to tackle the debt crisis.

USD_Correction_on_Horizon_GBP_Outlook_Hinges_on_BoE_Inflation_Report_body_ScreenShot054.png, USD Correction on Horizon, GBP to Take Cues from BoE Inflation Report

Indeed, Boston Fed President Eric Rosengren argued that the FOMC should embark on an’ open-ended’ quantitative easing program of ‘substantial magnitude’ amid the heightening turmoil in the world economy, and went onto say that the new initiative should ‘focus on economic outcomes’ in an effort to encourage a stronger recovery. However, as the committee continues to carry out ‘Operation Twist,’ it seems as though the Fed will sit on the sidelines over the remained of the year, and we may see Chairman Ben Bernanke continue to soften his dovish tone for monetary policy as the economy gets on a more sustainable path. Indeed, the move below trendline support might turn out to be a false break as the relative strength index continues to straddle the upward trend from earlier this year, and a close above the 10,000 figure could pave the way for a short-term correction in the index.

USD_Correction_on_Horizon_GBP_Outlook_Hinges_on_BoE_Inflation_Report_body_ScreenShot055.png, USD Correction on Horizon, GBP to Take Cues from BoE Inflation Report

The greenback weakened against three of the four components, led by a 0.31 percent rally in the British Pound, but the sterling may struggle to hold its ground over the next 24-hours of trading as the Bank of England quarterly inflation report is expected to highlight a weakening outlook for the U.K. Indeed, there’s speculation that the BoE will curb its forecast for growth and inflation amid the deepening recession, and Governor Mervyn King may lean towards additional quantitative easing as the central bank sees a renewed risk of undershooting the 2% target for inflation. In turn, a very dovish statement may spark a sharp selloff in the exchange rate, and we may see the GBPUSD threaten interim support around the 1.5500 figure as market participants increase bets for more monetary 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

Meet the DailyFX team in Las Vegas at the annual FXCM Traders Expo, November 2-4, 2012 at the Rio All Suite Hotel & Casino. For additional information regarding the schedule, workshops and accommodations, visit the FXCM Trading Expo website.

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

DISCLOSURES