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
Mixed
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
Wall Street
Bearish
Gold
Bearish
GBP/USD
Bullish
USD/JPY
Bullish
More View more
Real Time News
  • GBP/USD continues to struggle to break through psychological resistance at the 1.25 mark, as it has throughout this month so far.Get your $GBPUSD market update from @MartinSEssex here: https://t.co/6ERhzKaA7s https://t.co/cIeo4DqTLB
  • Indices Update: As of 13:00, these are your best and worst performers based on the London trading schedule: US 500: -0.51% Wall Street: -0.74% France 40: -0.98% Germany 30: -1.32% FTSE 100: -1.55% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/73COlz9pMA
  • the term 'parabolic' may be in use quite a bit over the next few days/weeks with what's been going on in $TSLA $AMZN and now $SHCOMP https://t.co/LXXfi0duOk
  • The $USDCNH has aligned to the Chinese Index's rally. Here is the exchange rate overlaid with the SPX-SHCOMP ratio and a 10-day (2 week) correlation coefficient between the two is below: https://t.co/fTPQ6LaZts
  • This has been an interesting move: the Shanghai Composite ($SHCOMP) has posted its largest 5-day rally since Dec 8, 2014 while other risk benchmarks globally have somewhat spun their tires https://t.co/FJdBNuhlOW
  • 🇷🇺 Foreign Exchange Reserves (JUN) Actual: $568.9B Previous: $566.1B https://www.dailyfx.com/economic-calendar#2020-07-07
  • Heads Up:🇺🇸 Fed Bostic Speech due at 13:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-07-07
  • Heads Up:🇷🇺 Foreign Exchange Reserves (JUN) due at 13:00 GMT (15min) Previous: $566.1B https://www.dailyfx.com/economic-calendar#2020-07-07
  • There are many different types of forex orders, which traders use to manage their trades. While these may vary between different brokers, there tends to be several basic FX order types all brokers accept. Learn about different FX order types here: https://t.co/lIJdiz4xSz https://t.co/Aj51jJraPw
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.37%, while traders in NZD/USD are at opposite extremes with 72.78%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/l8kBNxbrIK
Forex: USD To Rebound Ahead Of Fed Beige Book- JPY Reversal Under Way

Forex: USD To Rebound Ahead Of Fed Beige Book- JPY Reversal Under Way

2012-11-26 18:15:00
David Song, Strategist
Share:

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

9977.73

9988.6

9972.97

-0.04

41.14%

Forex_USD_To_Rebound_Ahead_Of_Fed_Beige_Book-_JPY_Reversal_Under_Way_body_ScreenShot072.png, Forex: USD To Rebound Ahead Of Fed Beige Book- JPY Reversal Under Way

Although the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) remains little changed on the day, we’re seeing the greenback threaten the lower bounds of the upward trending channel carried over from the previous month, but the recent weakness in the reserve currency may be short-lived as there appears to be a bullish divergence in the 30-minute relative strength index. As the USDOLLAR appears to be carving a short-term bottom around the 9,975 figure, the series of higher lows should pave the way for further dollar strength, and we may see the ascending channel continue to take shape in December as the Federal Reserve turns increasingly optimistic towards the world’s largest economy. As the recovery becomes more broad-based, we should see Fed Chairman Ben Bernanke continue to soften his dovish tone for monetary policy, and the central bank head may endorse a more neutral tone going forward as the region gets on a more sustainable path.

Forex_USD_To_Rebound_Ahead_Of_Fed_Beige_Book-_JPY_Reversal_Under_Way_body_ScreenShot073.png, Forex: USD To Rebound Ahead Of Fed Beige Book- JPY Reversal Under Way

Indeed, the Fed’s Beige Book may highlight an improved outlook for growth amid the resilience in private sector consumption along with the picking in housing, and the fresh batch of central bank rhetoric may increase the appeal of the dollar as the district banks see a diminishing risk for a double-dip recession. In turn, we may see the USDOLLAR appreciate going into the December 12 meeting as market participants scale back bets for a further expansion in the central bank’s balance sheet. Although the fundamentals reinforce our bullish forecast for the greenback, we’re seeing the relative strength index breakout of the upward tend from back in September, and we may see the index fall back towards the 61.8 percent Fibonacci retracement around 9,949 as it searches for support. Nevertheless, the shift in the policy outlook should prop up the dollar going into 2013, and we are still looking for a run at the 10,100 figure as a growing number of Fed officials see limited scope for additional monetary support.

Forex_USD_To_Rebound_Ahead_Of_Fed_Beige_Book-_JPY_Reversal_Under_Way_body_ScreenShot074.png, Forex: USD To Rebound Ahead Of Fed Beige Book- JPY Reversal Under Way

Three of the four components weakened against the greenback, led by a 0.06 percent decline in the Euro, while the Japanese Yen bucked the trend, with the USDJPY extended the pullback from 82.82. Indeed, the recent decline in the exchange rate may turn into a larger correction as the relative strength index comes off of overbought territory, but the low-yielding currency may face additional headwinds over the near-term as Japanese policy makers put increased pressure on the Bank of Japan (BoJ) to adopt a more aggressive approach in addressing the risks surrounding the region. The BoJ remains poised to carry its easing cycle into the following year as the central bank struggles to stem the risk for deflation, and the committee may show an increased willingness to undertake an unlimited asset-purchase program as board members Takehiro Sato and Takahide Kiuchi look to implement ‘powerful easing until it judges the 1 percent goal to be in sight.’ Despite the dovish remains from the BoJ, the threat of a political shift in Japan puts increased pressure on the central bank’s independence, and the Yen may continue to benefit from positive real interest rates as policy makers across the globe maintain a highly accommodative policy stance.

--- 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, please follow this link.

New to FX? Watch this Video

Join us to discuss the outlook for the major currencies on the DailyFXForums

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

DISCLOSURES

News & Analysis at your fingertips.