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  • While JPY gets clobbered, CHF decides to turn a blind eye to yields $CHF https://t.co/MViWZiiPZ7
  • The surprise 100 basis point cut from the Turkish central bank (to 18%) generated the expected pressure for $USDTRY. That said, I don't think it was the market that decided the momentum should die out at 8.8000 again... https://t.co/4jmOPnzzK9
  • surprised that $NQ is holding up so well with what rates are doing. 10 year yield at a 2 month high, $Nasdaq still holding resistance at prior support https://t.co/UBWBxY2nFC
  • The S&P 500 has recovered all the ground it lost at the start of the week and the Dollar has slumped post FOMC and PMIs. DailyFX's @JohnKicklighter gives a brief overview of the market for Thursday! https://t.co/jihKB44ELn
  • https://t.co/lbNvVbQq4n
  • The future taper isn't enough to urge the Dollar to a critical bullish break. In turn, $EURUSD has reversed shy of of August's trough and keeps in play an inverse head-and-shoulders pattern with a neckline at 1.19 https://t.co/EgUtX6Pmvy
  • USD/CAD testing short-term moving average support. Traders have cut their long exposure over the week. Get your market update from @nickcawley1 here:https://t.co/iEL5cbFnHs https://t.co/6kLkUFkFvU
  • In the West, that qualifies as a default action. Let's see how it is treated in the world's second largest economy https://t.co/PKWy7SE8Dt
  • Some Evergrande offshore bondholders do not expect company to make interest payment by Thursday deadline
  • The flash September US PMIs slowed more sharply than expected. That was a general trend across the developed world with most economies continuing to slow from their post-Pandemic peak recovery paces https://t.co/TgkUDlOyAe
Euro Range in Focus- USD/JPY Downside Targets Remain Favored

Euro Range in Focus- USD/JPY Downside Targets Remain Favored

David Song, Strategist

Talking Points:

- EUR/USD Range in Focus; EU Court Ruling in Favor of ECB’s OMT Program.

- USD/JPY Slips to Fresh Monthly Low as Risk Appetite Continues to Falter.

- USDOLLAR Weighed by Dismal U.S. Retail Sales; Risks Larger Correction on Weak CPI.

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EUR/USD

EUR/USD Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • EUR/USD pares decline to 1.1726 even as European Court of Justice rules in favor of the European Central Bank’s (ECB) Outright Monetary Transactions (OMT) program; close above 1.1740 may continue to signal range-bound prices ahead of the January 22 meeting.
  • With growing expectations of seeing the ECB announce its quantitative easing (QE) program next week, may see a short-squeeze in EUR/USD should the Governing Council fail to act.
  • DailyFX Speculative Sentiment Index (SSI) show retail crowd remains net-long EUR/USD, with the ratio currently standing at +1.18.

USD/JPY

USD/JPY Daily Chart
  • USD/JPY extends decline as risk appetite continues to wane; downside targets remain favored as the Relative Strength Index (RSI) retains the bearish momentum.
  • Need to see a close below 116.10 (61.8% retracement) for conviction/confirmation for a larger pullback in USD/JPY.
  • May see a test of the December lows (115.55) followed by 114.55 (78.6% retracement) should the Japanese Yen continue to benefit from the drop in market sentiment.

Join DailyFX on Demand for Real-Time SSI Updates Across the Majors!

Read More:

Price & Time: USD/JPY Topping Out Or Just Consolidating?

Momentum Gathering Pace in EUR-crosses - Watch EUR/USD 5-EMA

USDOLLAR(Ticker: USDollar):

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

11615.97

11665.86

11588.21

-0.27

168.06%

Euro Range in Focus- USD/JPY Downside Targets Remain FavoredUSDOLLAR Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • Dow Jones-FXCM U.S. Dollar falls to a fresh weekly low of 11,587 following as Retail Sales report disappoints; may face a larger pullback should it fail to close above 11,623 (23.6% retracement).
  • May see the dollar face additional headwinds later this week should the U.S. Consumer Price Index (CPI) show a greater risk for disinflation & drag on interest rate expectations.
  • Break of the bullish RSI momentum may highlight a larger USDOLLAR decline, with the next downside objective coming in around 11,567 (38.2% retracement).

Join DailyFX on Demand for Real-Time SSI Updates!

Release

GMT

Expected

Actual

MBA Mortgage Applications (JAN 9)

12:00

--

49.1%

Advance Retail Sales (MoM) (DEC)

13:30

-0.1%

-0.9%

Advance Retail Sales ex Auto (MoM) (DEC)

13:30

0.0%

-1.0%

Advance Retail Sales ex Auto & Gas (MoM) (DEC)

13:30

0.5%

-0.3%

Advance Retail Sales Control Group (DEC)

13:30

0.4%

-0.4%

Import Price Index (MoM) (DEC)

13:30

-2.7%

-2.5%

Import Price Index (YoY) (DEC)

13:30

-5.2%

-5.5%

Business Inventories (NOV)

15:00

0.3%

Fed Publishes Beige Book Economic Survey

19:00

Click Here for the DailyFX Calendar

--- 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.

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