Talking Points:
- EUR/USD Range Vulnerable as Greece Struggles to Secure Bailout Extension.
- USD/CAD Rebound to Accelerate on Dismal Canada Retail Sales Report.
- USDOLLAR Holds Tight Range Ahead of FOMC Minutes; Forward-Guidance in Focus.
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Chart - Created Using FXCM Marketscope 2.0
- Will continue to focus on the near-term range in EUR/USD as Greece struggles to secure an extension of its bailout program; will the event spur a ‘buy the rumor/sell the news’ reaction?
- The Purchasing Manager Indices (PMI) coming out of the euro-area may help limit the downside risk for EUR/USD as the data prints are expected to show a pickup in economic activity.
- DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-short EUR/USD, but seeing the ratio continue to narrow from the extreme readings from earlier this month as the ratio currently sits at -1.54.
USD/CAD
- Near-term rebound in USD/CAD may gather pace over the next 24-hours of trade as Canada’s Retail Sales report is expected to show a 0.4% contraction in December; may spur speculation for another Bank of Canada (BoC) rate cut.
- Will also keep a close eye on oil prices amid the growing correlation with the Canadian dollar; crude remains vulnerable to a further decline as it struggles to hold above the $53 handle.
- As USD/CAD continues to hold above the monthly opening low (1.2350), will keep a close eye on the string of lower-highs at 1.2696 and 1.2797.
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USDOLLAR Back in Pre-FOMC Range - Will Greece Deal Stoke EUR/USD?
USDOLLAR(Ticker: USDollar):
| Index | Last | High | Low | Daily Change (%) | Daily Range (% of ATR) |
|---|---|---|---|---|---|
| DJ-FXCM Dollar Index | 11775.44 | 11798.17 | 11755.09 | 0.00 | 70.17% |
Chart - Created Using FXCM Marketscope 2.0
- Dow Jones-FXCM U.S. Dollar pares decline to 11,754 despite the slew of dismal U.S. data; despite the cautious tone laid out in the Federal Open Market Committee (FOMC) Minutes, seeing mixed reactions to the fresh batch of central bank rhetoric.
- Will retain bullish view for USDOLLAR as it continues to close above 11,774; waiting for a break of the bearish momentum in the Relative Strength Index (RSI) to favor a further advance in the greenback.
- Until then, will continue to watch the near-term range of 11,721 (38.2% expansion) to 11,901 (78.6% expansion).
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| Release | GMT | Expected | Actual |
|---|---|---|---|
| Initial Jobless Claims (FEB 14) | 13:30 | 290K | 283K |
| Continuing Claims (FEB 7) | 13:30 | 2360K | 2425K |
| Philadelphia Fed Business Outlook (FEB) | 15:00 | 9.0 | 5.2 |
| Leading Index (JAN) | 15:00 | 0.3% | 0.2% |
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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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