Talking Points:

- GBP/USD Threatens Bullish RSI Momentum Ahead of BoE Rhetoric- 1.4700 Remains Key.

- USD/JPY Tests 118.20 Support Ahead of Japan CPI; Broader Range in Focus.

- USDOLLAR Continues to Rebound from Support- 4Q GDP, Fed’s Yellen and Fischer on Tap.

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GBP/USD

GBP/USD Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • May continue to see range-bound prices in GBP/USD amid the failed attempts to close above 1.4980 (38.2% retracement) to 1.5015 (50% expansion), while the RSI fails to retain the bullish momentum.
  • With the rebound in U.K. Retail Sales, may see Bank of England (BoE) officials sound more upbeat, with Andy Haldane, Ben Broadbent, and Governor Mark Carney scheduled to speak on Friday; may see more of the same from the committee ahead of the May election.
  • Even though DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-long GBP/USD, seeing the ratio narrow to +1.49 amid the pickup in short-interest.

USD/JPY

USD/JPY Daily Chart
  • Despite the rebound ahead of near-term support around 118.20 (61.8% retracement), USD/JPY may continue to probe fresh lows as the bearish RSI momentum appears to be gathering pace.
  • A marked slowdown in Japan’s Consumer Price Index (CPI) may ramp up bets for additional monetary support, but it seems as though the Bank of Japan (BoJ) will retain its current policy throughout the first-half of 2015 as Governor Haruhiko Kuroda remains upbeat on the economy.
  • Despite the capital-flows going into the end of Japan’s fiscal year, bearish momentum favors the downside targets, with the next region of interest coming in around 117.00 (61.8% expansion) to 117.20 (78.6% retracement).

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Read More:

Price & Time: Cable Bucking the Correction

EURJPY Long Scalps at Risk Below FOMC High- Interim Support 130.60

USDOLLAR(Ticker: USDollar):

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

11957.82

11969.25

11889.53

0.10

91.19%

GBP/USD 1.47 Support in Focus Ahead of BoE Rhetoric as Momentum WanesUSDOLLAR Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • Despite the mixed batch of data coming out of the U.S. economy, the Dow Jones-FXCM U.S. Dollar index may continue to track sideways and trade above the low (11,886) marked by the Federal Open Market Committee (FOMC) meeting as the bullish trending channel largely remains in play.
  • Will keep a close eye on the fresh batch of central bank rhetoric from Fed Chair Janet Yellen and Vice-Chair Stanley Fischer amid the shift in the forward-guidance for monetary policy; may see the Fed commentary have a greater impact than the final 4Q Gross Domestic Product (GDP) report .
  • 11,992 (38.2% retracement) remains largely in focus, but need a break of the bearish RSI momentum to revert back to the approach to ‘buy-dips’ in the greenback.

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Release

GMT

Expected

Actual

Initial Jobless Claims (MAR 21)

12:30

290K

282K

Continuing Claims (MAR 14)

12:30

2400K

2416K

Markit Purchasing Manager Index- Services (MAR P)

13:45

57.0

58.6

Markit Purchasing Manager Index- Composite (MAR P)

13:45

--

58.5

Kansas City Fed Manufacturing Activity Index (MAR)

15:00

1

-4

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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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