Euro Vulnerable to ECB, Greek Election- AUD to Face China 4Q GDP
16 Jan 2015 18:15, GMTTalking Points:
- EUR/USD Downside Targets Remain Favored Ahead of ECB Meeting, Greek Elections
- AUD/USD Range Vulnerable to Slowing China 4Q GDP.
- USDOLLAR Continues to Track Sideways Ahead of CPI, U. of Michigan Confidence.
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Chart - Created Using FXCM Marketscope 2.0
- EUR/USD extends decline and remains at risk for a further decline especially as the Relative Strength Index (RSI) pushes deeper into oversold territory.
- Beyond expectations for the European Central Bank (ECB) to announce a QE program range from EUR 500B to EUR 1T, the Greek elections may also undermine the outlook for the single currency should the region struggle to form a government.
- Even though the retail crowd remains net-long EUR/USD, DailyFX Speculative Sentiment Index (SSI) narrows going into the weekend, with the ratio currently standing at +1.26.
AUD/USD
- Will continue to watch the short-term string of higher highs & lows in AUD/USD, but may continue to face range-bound prices in the week ahead should it fail to close above 0.8210-20 (23.6% retracement)
- Despite the light economic docket for Australia, China’s 4Q Gross Domestic Product (GDP) report may drag on the higher-yielding currency as the growth rate is expected to slow to an annualized 7.2% from 7.3% during the three-months through September.
- Close above 0.8210-20 should spark a larger rebound and may expose 0.8310 (78.6% expansion) to 0.8320 (38.2% retracement).
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USDOLLAR(Ticker: USDollar):
| Index | Last | High | Low | Daily Change (%) | Daily Range (% of ATR) |
|---|---|---|---|---|---|
| DJ-FXCM Dollar Index | 11675.78 | 11714.28 | 11620.44 | 0.36 | 183.92% |
Chart - Created Using FXCM Marketscope 2.0
- Despite the stronger-than-expected headline reading for U.S. inflation, looks as though the Dow Jones-FXCM U.S. Dollar will preserve the opening monthly range for now.
- Topside targets remain favored amid as long as the greenback continues to close above 11,623 (23.6% retracement), while the RSI retains the bullish momentum.
- Will continue to watch support and resistance on USDOLLAR as the greenback looks poised to face range-bound prices going into the market holiday on Monday.
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| Release | GMT | Expected | Actual |
|---|---|---|---|
| Consumer Price Index (MoM) (DEC) | 13:30 | -0.4% | -0.4% |
| Consumer Price Index (YoY) (DEC) | 13:30 | 0.7% | 0.8% |
| Consumer Price Index ex Food and Energy (MoM) (DEC) | 13:30 | 0.1% | 0.0% |
| Consumer Price Index ex Food and Energy (YoY) (DEC) | 13:30 | 1.7% | 1.6% |
| Consumer Price Index n.s.a. (DEC) | 13:30 | 234.611 | 234.813 |
| Consumer Price Index Core s.a. (DEC) | 13:30 | 239.635 | 239.339 |
| Industrial Production (MoM) (DEC) | 14:15 | -0.1% | -0.1% |
| Capacity Utilization (DEC) | 14:15 | 79.9% | 79.7% |
| Manufacturing Production (SIC) (DEC) | 14:15 | 0.2% | 0.3% |
| U. of Michigan Confidence (JAN P) | 15:00 | 94.1 | 98.2 |
| Total Net TIC Flows (NOV) | 21:00 | -- | |
| Net Long-Term TIC Flows (NOV) | 21:00 | -- |
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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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