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EUR/USD Capped by Monthly Opening Range- AUD Retains Bearish Momentum

EUR/USD Capped by Monthly Opening Range- AUD Retains Bearish Momentum

David Song, Strategist

Talking Points:

- EUR/USD Holds Opening Monthly Range as ECB Continues to Endorse Dovish Outlook.

- AUD/USD Retains Long-Term Bearish RSI Momentum Ahead of RBA Minutes.

- USDOLLAR Makes Another Attempt to Breakout; Watching RSI for Conviction/Confirmation.

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EUR/USD

EUR/USD Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • EUR/USD fails to break the opening monthly high (1.2576) and struggles to hold its ground as the European Central Bank (ECB) is widely expected to lower its growth & inflation forecast at the December 4 policy meeting.
  • Bearish momentum in the Relative Strength Index (RSI) continues to favor the approach to sell-bounces in EUR/USD; a break of the November low (1.2356) would expose 1.2280-90 (100% expansion).
  • Seeing increased volatility in the DailyFX Speculative Sentiment Index (SSI) as retail crowd turns net-long on EUR/USD, with the ratio currently standing at +1.12.

AUD/USD

AUD/USD Daily Chart
  • AUD/USD appears to have made another failed attempt to push back above former support around 0.8760 (61.8% retracement) to 0.8785 (78.6% expansion) especially as the RSI retains the bearish structure carried over from back in April.
  • May see the Reserve Bank of Australia (RBA) Minutes dampen the appeal of the higher-yielding currency as Governor Glenn Stevens retains the verbal intervention on the aussie.
  • Failure to hold the monthly low (0.8539) should expose the next downside objectives around 0.8510 (50% expansion) to 0.8525 (50% expansion).

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Read More:

Price & Time: EUR/USD Fails At Key Gann Resistance

USDOLLAR and EURUSD Diverge at Turns; Reversal Warning

USDOLLAR(Ticker: USDollar):

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

11285.71

11296.05

11219.91

0.22

120.54%

EUR/USD Capped by Monthly Opening Range- AUD Retains Bearish MomentumUSDOLLAR Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • Despite the mixed batch of data, the Dow Jones-FXCM U.S. Dollar Index is making another attempt to break out of the wedge/triangle formation; need to see a bullish break in RSI for conviction/confirmation for another topside push.
  • Will monitor the fresh developments entailed in the Federal Open Market Committee’s (FOMC) meeting minutes as a growing number of central bank officials show a greater willingness to normalize monetary policy in mid-2015.
  • Will favor a more meaningful push into the 11,312 (78.6% retracement) and 11,351 (78.6% expansion) region once the RSI breaks out of the bearish formation from the end of September.

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Release

GMT

Expected

Actual

Empire Manufacturing (NOV)

13:30

12.00

10.16

Industrial Production (OCT)

14:15

0.2%

-0.1%

Capacity Utilization (OCT)

14:15

79.3%

78.9%

Manufacturing Production (SIC) (OCT)

14:15

0.2%

0.2%

Fed's Charles Evans Speaks on U.S. Economy

15:00

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--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

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