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.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
USD Outlook Hinges on FOMC- GBP to Target Fresh Highs on Strong GDP

USD Outlook Hinges on FOMC- GBP to Target Fresh Highs on Strong GDP

David Song, Strategist

Talking Points:

- USDOLLAR Correction in Focus Ahead of Fed Meeting

- GBPUSD to Target Fresh Highs Should 4Q GDP Highlight Stronger Recovery





Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index







Forex_USD_Outlook_Hinges_on_FOMC_GBP_to_Target_Fresh_Highs_on_Strong_GDP_body_Picture_3.png, USD Outlook Hinges on FOMC- GBP to Target Fresh Highs on Strong GDP

Chart - Created Using FXCM Marketscope 2.0

  • Retain Game Plan to ‘Selling Bounces’ Ahead of FOMC Meeting
  • Bearish RSI Divergence Favors ‘Selling Bounces’
  • Interim Resistance: 10,753 (23.6 expansion) to 10,759 (61.8 retracement)
  • Interim Support: 10,561 (100.0 extension)- Closing Basis





New Home Sales (DEC)




New Home Sales (MoM) (DEC)




Dallas Fed Manufacturing Activity (JAN)



The near-term correction in the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) remains in focus ahead of the Federal Open Market Committee (FOMC) meeting on tap for later this week as market participants weigh the outlook for monetary policy.

As we’ve been discussing in DailyFX on Demand, we still favor ‘selling bounces’ in the greenback as the bearish divergence in the Relative Strength Index continues to take shape, and the reserve currency may face a larger decline going into February should the Fed further delay its exit strategy.

With the limited reaction to the dismal New Home Sales report, it seems as though the dollar may continue consolidate ahead of Chairman Ben Bernanke’s last policy meeting, and the fresh developments coming out of the central bank is likely to heavily influence the near-term outlook for the greenback as the FOMC starts to move away from its easing cycle.

Forex_USD_Outlook_Hinges_on_FOMC_GBP_to_Target_Fresh_Highs_on_Strong_GDP_body_ScreenShot019.png, USD Outlook Hinges on FOMC- GBP to Target Fresh Highs on Strong GDP


Forex_USD_Outlook_Hinges_on_FOMC_GBP_to_Target_Fresh_Highs_on_Strong_GDP_body_Picture_1.png, USD Outlook Hinges on FOMC- GBP to Target Fresh Highs on Strong GDP
  • Still Searching for Higher High; RSI & Price Retains Bullish Trend
  • Interim Resistance: 1.6700 Pivot to 1.6730 (100.0 expansion)
  • Interim Support: 1.6300 Pivot to 1.6310 (50.0 expansion)

Two of the four components strengthened against the greenback, led by a 0.69 percent rally in the Australian dollar, while the British Pound gained 0.58 ahead of the advance 4Q U.K. GDP report, which is expected to show the region expanding another 0.7 percent during the last three-months of 2013.

In light of the better-than-expected data out of Britain, a marked pick-up in the growth rate should prompt fresh highs in the GBPUSD, and the pair may continue to track higher in February as it puts increased pressure on the Bank of England (BoE) to normalize monetary policy ahead of schedule.

In turn, we will maintain our bullish forecast for the British Pound, and the GBPUSD should continue to carve a series of higher highs paired with higher lows amid the ongoing shift in the policy outlook.

--- Written by David Song, Currency Analyst

To contact David, e-mail 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.