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EUR/USD Threatens Monthly Opening Range Ahead of OMT Ruling

EUR/USD Threatens Monthly Opening Range Ahead of OMT Ruling

David Song, Strategist

Talking Points:

- EUR/USD Threatens Monthly Opening Range Ahead of EU Court Ruling on ECB’s OMT Program.

- GBP/USD Range in Focus as BoE Governor Mark Carney Continues to See Higher Interest Rates.

- USDOLLAR Vulnerable to Larger Correction on Dismal Retail Sales Report.

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EUR/USD

EUR/USD Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • EUR/USD remains at risk for a further decline as it threatens monthly opening range, while the Relative Strength Index (RSI) continues to hold in oversold territory.
  • However, may see a relief rally as the European Court of Justice is expected to rule in favor of the European Central Bank’s Outright Monetary Transactions (OMT) program.
  • Seeing increased volatility in the DailyFX Speculative Sentiment Index (SSI) as retail crowd flipped back to net-long EUR/USD on January 13, with the ratio currently standing at +1.39.

GBP/USD

GBP/USD Daily Chart
  • Despite the marked slowdown in the Consumer Price Index (CPI), GBP/USD remains at risk for a larger correction as Bank of England (BoE) Governor Mark Carney continues to see higher borrowing-costs in the U.K., while the RSI comes off of oversold territory.
  • Nevertheless, long-term outlook remains bearish as GBP/USD continues to operate within the downward trending channel carried over from back in June; will watch former support zones for new resistance.
  • Next topside level of interest for GBP/USD comes in around 1.5300 (23.6% retracement) to 1.5320 (78.6% retracement).

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Read More:

Price & Time: Multi-Month Reversal Triggered in Gold

USDJPY Threatens Opening Range- Sub 118 Targets In View

USDOLLAR(Ticker: USDollar):

IndexLastHighLowDaily Change (%)Daily Range (% of ATR)
DJ-FXCM Dollar Index11646.8611678.1411611.310.10151.16%
USDOLLAR Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • Dow Jones-FXCM U.S. Dollar struggling to hold its ground despite the slew of better-than-expected confidence surveys; may face sideways price action amid the string of closes above 11,623 (100% expansion).
  • However, a decline in U.S. Retail Sales may dampen the appeal of the greenback & drag on interest rate expectations especially with the 2015 rotation within the Federal Open Market Committee (FOMC).
  • Will continue to watch the near-term range as USDOLLAR remains capped around 11,721 (38.2% expansion).

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ReleaseGMTExpectedActual
NFIB Small Business Optimism Survey (DEC)14:0098.5100.4
IBD/TIPP Economic Optimism (JAN)15:0048.751.5
JOLTS Job Openings (NOV)15:0048504972
Monthly Budget Statement (DEC)19:00$3.0B--

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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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