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
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Bullish
Wall Street
Mixed
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • Gold Price Forecast: Dovish FOMC Could Underpin Bullion Ahead of NFP - https://www.dailyfx.com/forex/fundamental/forecast/weekly/chf/2020/11/27/Gold-Price-Forecast-Dovish-FOMC-Could-Underpin-Bullion-Ahead-of-NFP.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Moss&utm_campaign=twr #Gold #XAUUSD $GOLD $GLD https://t.co/N9ChZOqSdy
  • Forex Update: As of 21:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.42% 🇦🇺AUD: 0.35% 🇳🇿NZD: 0.30% 🇨🇦CAD: 0.20% 🇯🇵JPY: 0.16% 🇬🇧GBP: -0.33% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/4uyJxc09OH
  • Commodities Update: As of 21:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 1.48% Gold: -1.28% Silver: -2.80% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/pbfmvnsvuu
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 93.65%, while traders in France 40 are at opposite extremes with 78.02%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/NL3bVphnYH
  • Indices Update: As of 21:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 0.64% Germany 30: 0.04% US 500: 0.00% Wall Street: 0.00% France 40: -0.02% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/uZ1HjcIJ4q
  • GBP/USD continues to fail around the 1.3400 level and is unlikely to make a confirmed break higher ahead of any trade talk confirmation. Get your $GBPUSD technical analysis from @nickcawley1 here:https://t.co/EWLFXK1q3q https://t.co/4XSSNxobMo
  • The Gold price sell-off has broken below key technical barriers and leaves the outlook for XAU/USD weighted to the downside heading into the close of the month. Get your $XAUUSD technical analysis from @MBForex here:https://t.co/3YLcAFlr5f https://t.co/1uFb9UkDvV
  • Commodities Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 1.48% Gold: -1.28% Silver: -2.80% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/OvThGydQBs
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 93.65%, while traders in France 40 are at opposite extremes with 78.02%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/Yq6wLxhblV
  • Vaccine Optimism Sparks 28% Increase in Oil Prices. Get your #crudeoil market update from @JMcQueenFX here:https://t.co/F3AlSkniXk https://t.co/qevY4Gh6o9
USDOLLAR Breakout Eyes Topside Targets- Time to Buy Dips

USDOLLAR Breakout Eyes Topside Targets- Time to Buy Dips

2013-08-29 16:20:00
David Song, Strategist
Share:

The Dow Jones-FXCM U.S. Dollar Index broke out of the bearish trend carried over from the previous month amid the positive developments coming out of the U.S. economy.

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10796.33

10800.64

10736.02

0.42

117.57%

USDOLLAR 30-Minute

Forex_USDOLLAR_Breakout_Eyes_Topside_Targets_Time_to_Buy_Dips_body_ScreenShot035.png, USDOLLAR Breakout Eyes Topside Targets- Time to Buy Dips

Chart - Created Using FXCM Marketscope 2.0

  • Near-term resistance: 10,803 (38.2 retracement) - 10,806 (78.6 expansion)
  • Former resistance (61.8 percent retracement- 10,764) to act as new support
  • 30-Minute Relative Strength Index falling back from a high of 77
  • Game plan: buy dips

Release

GMT

Expected

Actual

Gross Domestic Product (Annualized) (2Q P)

12:30

2.2%

2.5%

Personal Consumption (2Q P)

12:30

1.7%

1.8%

Gross Domestic Product Price Index (2Q P)

12:30

0.7%

0.8%

Core Personal Consumption Expenditure (QoQ) (2Q P)

12:30

0.8%

0.8%

Initial Jobless Claims (AUG 24)

12:30

332K

331K

Continuing Claims (AUG 17)

12:30

2988K

2989K

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) climbed to a fresh monthly high of 10,799 as the preliminary 2Q GDP report highlighted a stronger recovery in the U.S. economy, and the bullish sentiment surrounding the reserve currency should gather pace ahead of the next Fed policy meeting on September 17-18 as the outlook for growth and inflation improves.

The near-term outlook for the greenback remains very constructive as the index continues to carve a series of higher highs paired with higher lows, but the dollar may face a small correction going into the final trading day of August as the 30-minute relative strength index falls back from overbought territory. Nevertheless, we may see a limited downside move in the USDOLLAR as we anticipate former resistance around the 61.8 percent Fibonacci retracement (10,764) to now act as support, and we will look for opportunities to buy dips in the greenback amid the growing arguments for the FOMC to taper its asset-purchase program.

USDOLLAR Daily

Forex_USDOLLAR_Breakout_Eyes_Topside_Targets_Time_to_Buy_Dips_body_ScreenShot037.png, USDOLLAR Breakout Eyes Topside Targets- Time to Buy Dips

The dollar should continue to retrace the decline from the previous month as it breaks out of the downward trending channel, and the USD may ultimately carve a fresh 2013 high (higher high) next month as the Fed looks to move away from its easing cycle.

Market participants are looking at two possible scenarios for the FOMC, with the committee either maintaining its current policy or scaling back on quantitative easing, but Chairman Ben Bernanke may continue to take a unorthodox approach as the central bank prepares to switch gears in the coming months. Indeed, the Fed may resort to laying out a more detailed exit strategy rather than shifting its policy stance, but even such a scenario may heighten the bullish sentiment surrounding the dollar as the Fed prepares to change course.

Forex_USDOLLAR_Breakout_Eyes_Topside_Targets_Time_to_Buy_Dips_body_ScreenShot039.png, USDOLLAR Breakout Eyes Topside Targets- Time to Buy Dips

EURUSD Daily

Forex_USDOLLAR_Breakout_Eyes_Topside_Targets_Time_to_Buy_Dips_body_ScreenShot038.png, USDOLLAR Breakout Eyes Topside Targets- Time to Buy Dips
  • Carves near-term top around 1.3450
  • Bearish divergence in RSI points to further weakness; looking to sell rallies
  • Close above 1.3240 (78.6 percent expansion) may produce a small correction
  • 50-Day SMA (1.3185) on the radar; 1.3110-30 range critical

Once again the greenback rallied across the board, driven by a 0.82 percent decline in the Euro, and the EURUSD may continue to give back the rebound from July (1.2754) as the pair carves a top in August.

The bearish divergence in the relative strength index continues to highlight a bearish outlook for the single currency, but the EURUSD may face range-bound prices ahead of the European Central Bank (ECB) interest rate decision on September 5 as the euro-area returns to growth.

In turn, there’s speculation that a more upbeat ECB will prop up the single currency over the near-term, but central bank President Mario Draghi may sound more dovish this time around amid the growing risk for deflation.

--- 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.

Trade Alongsidethe DailyFX Team on Analyst on Demand

Looking to use the DailyFX Trade Signals LIVE? Check out Mirror Trader.

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