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
  • Heads Up:🇲🇽 Unemployment Rate (AUG) due at 11:00 GMT (15min) Expected: 4.4% Previous: 4.4% https://www.dailyfx.com/economic-calendar#2021-09-28
  • Heads Up:🇧🇷 BCB Copom Meeting Minutes due at 11:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-09-28
  • The non-farm payroll (NFP) figure is a key economic indicator for the United States economy. It is also referred to as the monthly market mover. Find out why it has been given this nickname here: https://t.co/yOUVEEqhc5 https://t.co/VWpQJflwqb
  • USD approaching YTD high (93.73) Factors supporting USD - Yields picking up - Risk appetite weaker - Corporate month end, typically USD positive https://t.co/MOjs8VqRav
  • China State Grid says will strictly control power consumption by high-energy consuming polluting sectors - Will closely monitor supply of thermal coal, hydro and wind power
  • Citi lowers China 2022 GDP forecast 4.9% from 5.5%, citing expected spillover from managed Evergrande restructuring
  • Knowing how to accurately value a stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZFxlk https://t.co/8p6STxmVC6
  • Spooz sub 50-DMA again. There’s been some selling overnight during the European sessions yesterday and today. Sure hope this doesn’t shape up into a H&S topping pattern, but has anyone else noticed lower highs and lower lows forming? 👀 $SPX $ES #SP500 https://t.co/Bf3Icn2T2H https://t.co/vf8jgtVstk
  • PBoC Governor - PBoC has the conditions in place to maintain a normal and rising yield curve - Sees no need to purchase assets now
  • Not today I’m afraid. I’m on holiday in Ventnor in the lovely Isle of Wight https://t.co/iIm6hBksLs
Forex: USD Outlook Supported By Less-Dovish Fed, AUD Finds Resistance

Forex: USD Outlook Supported By Less-Dovish Fed, AUD Finds Resistance

David Song, Strategist

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10059.2

10075.47

10040.89

0.11

76.21%

Forex_USD_Outlook_Supported_By_Less-Dovish_Fed_AUD_Finds_Resistance_body_ScreenShot164.png, Forex: USD Outlook Supported By Less-Dovish Fed, AUD Finds Resistance

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is now 0.11 percent higher from the open after moving 76 percent of its average true range, and we may see the greenback make another run at the 10,150 figure as the FOMC scales back its willingness to expand the balance sheet further. As the 30-minute relative strength index bounces back from support (13), the recent strength in the greenback should get carried into the week ahead, and we may see another short-term rally in the dollar as a slew of Fed officials, including Chairman Ben Bernanke, are scheduled to speak next week. Even though the Fed sticks to the sidelines, the shift in central bank rhetoric is likely to influence USD price action, and we should see the bullish trend continue to take shape in the week ahead as market participants scale back bets for more quantitative easing.

Forex_USD_Outlook_Supported_By_Less-Dovish_Fed_AUD_Finds_Resistance_body_ScreenShot165.png, Forex: USD Outlook Supported By Less-Dovish Fed, AUD Finds Resistance

Philadelphia Fed President Charles Plosser warned ‘efforts to drive real rates more negative or promises to keep rates low for a long time may have frustrated households’ efforts to rebuild their balance sheets without stimulating aggregate demand or consumption,’ and went onto say that the central bank ‘must guard against the medium- and longer-term risks of inflation’ as economic recovery gradually gathers pace. In contrast, Minneapolis Fed Narayana Kocherlakota argued that ‘monetary policy is currently too tight’ amid the ongoing slack in the real economy, but we may see the unprecedented steps taking by the FOMC come under increased criticism as the outlook for growth and inflation improves. As the USDOLLAR continues to trade within the upward trending channel dating back to September, we will be watching the 50-Day SMA (9,996) for key support, and will maintain a bullish forecast going into the next Fed meeting on January 30 as the central bank drops its dovish tone for monetary policy.

Forex_USD_Outlook_Supported_By_Less-Dovish_Fed_AUD_Finds_Resistance_body_ScreenShot166.png, Forex: USD Outlook Supported By Less-Dovish Fed, AUD Finds Resistance

The greenback advanced against three of the four components, led by a 0.42 percent decline in the Australian dollar, but the recent weakness in the higher-yielding currency may be short-lived as the data on tap for the following week is expected to encourage an improved outlook for the $1T economy. As Australian employment is expected to increase another 4.5K in December, with home loans expanding 0.5% in November, a slew of positive developments may increase the appeal of the aussie, but we may see the Reserve Bank of Australia (RBA) keep the door open to expand monetary policy further as it aims to encourage a stronger recovery. As the AUDUSD struggles to push back above the 1.0600, the key figure should continue to hold up as resistance, and we will look a more meaningful move to the downside as the relative strength index on the pair remains capped by the 67 region.

--- 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