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
Wall Street
Bullish
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
Gold
Bearish
GBP/USD
Bullish
USD/JPY
Bullish
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
More View more
Real Time News
  • $gld prices may face heightened liquidation pressure as US-China tensions over Hong Kong heat up ahead of US GDP data amid the coronavirus pandemic. Get your $XAUUSD market update from @ZabelinDimitri here: https://t.co/vmoJXC2KSm https://t.co/dNGB1d0T9C
  • Slightly risk-on start to the beginning of the week. #AUD up with APAC stocks and #SPX index futures, anti-risk #JPY and #USD broadly lower https://t.co/P07MrhWHPe
  • Market snapshot: US equity futures pointing higher while FX markets remain mixed
  • (Asia AM) The #SP500 shrugged off risk aversion to end last week higher, but upside momentum seems to be fading. US markets are offline today, raising the risk of volatility - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2020/05/24/SP-500-Struggling-at-Resistance-Volatility-Risk-Ahead-Elevated.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/RJXBa0tyS5
  • LIVE NOW: In this session, Strategist @DavidJSong will discuss trading strategies for the top event risk in the week ahead https://www.dailyfx.com/webinars/175202251
  • LIVE IN 30 MIN: In this session, Strategist @DavidJSong will discuss trading strategies for the top event risk in the week ahead https://www.dailyfx.com/webinars/175202251
  • The possibility of a Covid-19 cure by year end keeps market sentiment high despite ongoing political tensions. Get your $USDMXN market update from @HathornSabin here: https://t.co/6DIf6krA3E https://t.co/IxeRbjHpQm
  • Join analyst @DavidJSong at 6:30 PM ET/10:30 PM GMT for your weekly update on key news trading events. Register here: https://t.co/gBlrRpCc55 https://t.co/qqWZkK1G8B
  • The commodity currencies, AUD, CAD, and NZD, which typically benefit from their higher yield profile relative to other currencies (the carry trade), no longer hold this advantage. Get your #currencies market update from @CVecchioFX here: https://t.co/3oWXhp0hCX https://t.co/qOgXnf0JKK
  • The long-term outlook for the Euro has been boosted significantly by a Franco-German proposal for a €500 billion coronavirus Recovery Fund, even though an agreement is not yet close. Get your $EURUSD market update from @MartinSEssex here: https://t.co/onP43pXuDi https://t.co/nynDJ9P6br
USD Divergence Taking Shape- GBP Targets 1.6400 on BoE Policy

USD Divergence Taking Shape- GBP Targets 1.6400 on BoE Policy

2013-11-28 15:55:00
David Song, Strategist
Share:

Talking Points:

- USDOLLAR Retains Range During Holiday Trade; Threatening Bullish Formation

- Pound Eyes 1.6400 as Bank of England (BoE) Removes Funding-for-Lending Scheme (FLS)

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10624.79

10645.83

10613.82

-0.16

66.85%

USDOLLAR Daily

Forex_USD_Divergence_Taking_Shape-_GBP_Targets_1.6400_on_BoE_Policy_body_Picture_3.png, USD Divergence Taking Shape- GBP Targets 1.6400 on BoE Policy

Chart - Created Using FXCM Marketscope 2.0

  • Bounces Off of Trendline Support; May Stay Range-Bound Over Holiday Trade
  • Bearish Break in Relative Strength Index to Highlight Topping Formation
  • Interim Resistance: 10,658 (61.8 extension)- Former Support
  • Interim Support: 10,470 Pivot- Closing Basis

Release

GMT

Expected

Actual

No Scheduled Releases

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) bounced back from trendline support to retain the range-bound price action from earlier this week, but the upward momentum appears to be coming to an end amid the bearish break in the Relative Strength Index.

The RSI divergence suggests that the dollar will resume the series of lower highs paired with lower seen since July, and a more bearish outlook may take shape in December should the fundamental developments coming out of the U.S. economy undermine the Fed’s scope to taper the asset-purchase program at the last meeting for 2013.

In turn, a closing price below range support (10,604-15) should bring up the downside targets in the coming days, and we may see a more meaningful run at the 10,300 region as the dollar appears to be carving a near-term top.

Join DailyFX on Demandto Cover Current U.S. Dollar Trade Setups

Forex_USD_Divergence_Taking_Shape-_GBP_Targets_1.6400_on_BoE_Policy_body_ScreenShot017.png, USD Divergence Taking Shape- GBP Targets 1.6400 on BoE Policy

GBPUSD Daily

Forex_USD_Divergence_Taking_Shape-_GBP_Targets_1.6400_on_BoE_Policy_body_Picture_1.png, USD Divergence Taking Shape- GBP Targets 1.6400 on BoE Policy
  • Bullish Breakout Gathers Pace; Looking for Higher High
  • Relative Strength Index Approaching Overbought Territory
  • Interim Resistance: 1.6400 (61.8 expansion) to 1.6420 (1.618 expansion)
  • Interim Support: 1.6200 (23.6 retracement) to 1.6250 Pivot

The dollar weakened against three of the four components, led by a 0.40 percent rally in the British Pound, and the GBPUSD may continue to mark higher highs over the near-term amid the shift in the policy outlook.

With the Funding for Lending Scheme (FLS) set to expire next year, it seems as though the Bank of England (BoE) is making more apparent that it will implement its exit strategy ahead of schedule, and the policy meeting on December 5 may heighten the bullish sentiment surrounding the sterling should the central bank strike a more hawkish tone for monetary policy.

In turn, the GBPUSD may continue to work towards the next topside objective coming in around the 1.6400 handle, and the technical outlook may turn increasingly bullish over the near-term as the BoE moves away from its easing cycle.

--- 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 DailyFX 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.