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.

Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bearish
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
Mixed
Gold
Bullish
GBP/USD
Bullish
USD/JPY
Bullish
More View more
Real Time News
  • A recession is typically accompanied by falling stock prices, but equities are not the be-all and end-all for recession investment strategies. Get your market update from @PeterHanksFX here: https://t.co/H0Rf3AkECs https://t.co/5Il5ptMnMu
  • The $USD may rise versus the Singapore Dollar, Indonesian Rupiah and Malaysian Ringgit if capital flows out of #ASEAN countries as key U.S. data risks a selloff in equities. Get your market update from @ddubrovskyFX here: https://t.co/JWIRn6MLrK https://t.co/y2tXiYs9aV
  • The $USD may be at risk as trader positioning warns that the S&P 500 may bounce as markets look forward to fiscal stimulus. USD/CAD could rise if key support holds down the road.Get your market update from @ddubrovskyFX here:https://t.co/TMq9VZbZ7W https://t.co/H6I3MXjW06
  • As prices dance around on charts, traders are often looking for reasons to explain price movements; however, the underlying source of price movement boils down to the relationship between supply and demand. Learn more about the forces of S&D on forex here: https://t.co/8LfkLXbj2W https://t.co/ZsHdd9NFcO
  • The $USD may be at risk as trader positioning warns that the S&P 500 may bounce as markets look forward to fiscal stimulus. USD/CAD could rise if key support holds down the road.Get your market update from @ddubrovskyFX here:https://t.co/TMq9VZbZ7W https://t.co/TisnGYxllM
  • Here my weekend trading video 'Dow, VIX, Dollar and Gold: Levels and Volatility to Gauge the Markets' https://www.dailyfx.com/forex/video/daily_news_report/2020/03/28/Dow-VIX-Dollar-and-Gold-Levels-and-Volatility-to-Gauge-the-Markets-.html?ref-author=Kicklighter&QPID=917719&CHID=9
  • #Silver and #gold prices have had a fascinating 2020, counterintuitively falling as the #coronavirus’ economic hit has become horribly apparent. A rebound is now afoot. Get your market update from @DavidCottleFX here: https://t.co/nng7lwQ22E https://t.co/JwehIVbBA2
  • Foreign exchange – or “#forex” – markets often pay close attention to politics and central bank policy. We offer a model for traders to gauge their impact on exchange rates. Get your market insight from @ZabelinDimitri and @CVecchioFX here: https://t.co/FbXc1Awu6a https://t.co/mcq5Bq2Jui
  • The $USD soared against the Indonesian Rupiah, with USD/IDR eyeing its best month since the 1997-98 Asia financial crisis amid the #coronavirus outbreak. Can this trend continue? Find out from @ddubrovskyFX here:https://t.co/M3sDZOftrE https://t.co/sbIbp68UOh
  • The $USD may be at risk as technical signals show USD/SGD, USD/MYR and USD/IDR may turn lower. Ahead, the markets will likely weigh US fiscal stimulus bets against dismal data risk. Get your market update from @ddubrovskyFX here:https://t.co/iGqBrY6qyO https://t.co/kJ89YgK3Mm
USD Coiling Up Ahead of Fed’s Beige Book- Topside Break on Tap

USD Coiling Up Ahead of Fed’s Beige Book- Topside Break on Tap

2013-09-03 16:15:00
David Song, Strategist
Share:

The near-term correction in the Dow Jones-FXCM U.S. Dollar Index should provide a buying opportunity as the bullish trend continues to take shape.

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10792.96

10810.05

10783.09

-0.07

56.00%

USDOLLAR 30-Minute

Forex_USD_Coiling_Up_Ahead_of_Feds_Beige_Book-_Topside_Break_on_Tap_body_ScreenShot052.png, USD Coiling Up Ahead of Fed’s Beige Book- Topside Break on Tap

Chart - Created Using FXCM Marketscope 2.0

  • Near-term resistance: 10,803 (38.2 retracement) - 10,806 (78.6 expansion)
  • Support at 61.8 percent retracement- 10,764, 61.8 percent expansion- 10,772
  • 30-Minute Relative Strength Index breaks bearish momentum
  • Game plan: buy on pullback

Release

GMT

Expected

Actual

Construction Spending (MoM) (JUL)

14:00

0.4%

0.6%

ISM Manufacturing (AUG)

14:00

54.0

55.7

ISM Prices Paid (AUG)

14:00

51.2

54.0

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is struggling to maintain the advance to 10,810 despite the slew of positive developments coming out of the world’s largest economy, and the greenback may continue to consolidate during the North American trade as the ISM Manufacturing employment component highlights a slower rate of growth in the U.S. labor market.

Indeed, the dollar looks poised for a pullback as it comes up against interim resistance (10,803-10,806), but the recent weakness in the greenback is likely to be short-lived as the 30-minute relative strength index fails to maintain the bearish trend. In turn, the near-term correction may provide us with an opportunity to buy the reserve currency at a lower price, and the reserve currency appears to be coiling up for a move higher as former resistance (10,772) continues to offer support.

USDOLLAR Daily

Forex_USD_Coiling_Up_Ahead_of_Feds_Beige_Book-_Topside_Break_on_Tap_body_ScreenShot054.png, USD Coiling Up Ahead of Fed’s Beige Book- Topside Break on Tap

A topside break in the USDOLLAR should bring the 10,845 (78.6 percent expansion) – 10,850 (100.0 percent expansion) range on the radar, and the Fed’s Beige Book may spark a near-term rally in the reserve currency should we see a greater number of district banks highlight a stronger recovery.

A more upbeat Beige Book may heighten the case for the FOMC to start tapering its asset-purchase program at the September 17-18 meeting, and we are likely to see a further shift in the policy outlook as the U.S economy gets on a more sustainable path. As a result, we will continue to look for a series of higher highs paired with higher lows, and the dollar may ultimately mark fresh yearly-highs over the near to medium-term as the central bank moves away from its easing cycle.

Forex_USD_Coiling_Up_Ahead_of_Feds_Beige_Book-_Topside_Break_on_Tap_body_ScreenShot056.png, USD Coiling Up Ahead of Fed’s Beige Book- Topside Break on Tap

AUDUSD Daily

Forex_USD_Coiling_Up_Ahead_of_Feds_Beige_Book-_Topside_Break_on_Tap_body_ScreenShot055.png, USD Coiling Up Ahead of Fed’s Beige Book- Topside Break on Tap
  • Retains bearish trend; 50-Day SMA (0.9102) overlaps trendline resistance
  • Watch RSI as it approaches resistance (53); topside break may highlight range-bound prices
  • Interim resistance: 0.9210-20 (61.8 percent Fib retracement)
  • Soft support: 0.8990 pivot; 0.8700 (78.6 retracement) – 0.8710 (38.2 expansion)

Three of the four components weakened against the greenback, led by a 0.27 percent decline in the Euro, while the Australian dollar is bucking the trend as the Reserve Bank of Australia (RBA) kept the benchmark interest rate at 2.50 percent in September.

The RBA struck a rather neutral tone for the region, stating that the current policy stance remained appropriate, but the central bank may further embark on its easing cycle as the outlook for inflation remains subdued. At the same time, it seems as though Governor Glenn Stevens continues to favor a lower exchange rate to further assist the rebalancing of the real economy, and the central bank may continue to verbally intervene in the FX market to help address the risks surrounding the region.

In turn, we will retain our bearish forecast for the AUDUSD as it remains in a consolidation phase, and the relative strength index may provide a potential trigger to short the higher-yielding currency should the oscillator continue to find resistance around the 53 figure.

--- 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

News & Analysis at your fingertips.