Talking Points:
- AUD/USD Retail Crowd Remains Net-Long Even as Pair Posts Fresh-Low Ahead of RBA.
- SPX500 Continues to Lag Behind as Bearish RSI Momentum Remains in Play.
- USDOLLAR Remains Capped Ahead of Non-Farm Payrolls (NFP), Holiday Weekend.
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Chart - Created Using FXCM Marketscope 2.0
- AUD/USD slips to fresh low (0.7532); close below 0.7570 (50% expansion) to 0.7590 (100% expansion) raises the risk for a further decline in the exchange rate.
- May see a more meaningful run at 0.7490-0.7500 (61.8% expansion) amid growing bets the Reserve Bank of Australia (RBA) will further reduce the cash rate at the April 7 policy meeting; will Governor Glenn Stevens toughen up the verbal intervention on the aussie as the exchange rate approaches 0.7500?
- Despite the decline, the DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-long AUD/USD since March 30, with the ratio currently holding at +1.83.
SPX500
- Looks as though 2040 will continue to act as near-term support for SPX500, but may need a fundamental catalyst for a topside break as price continues to carve a string of lower-highs.
- Will keep a close eye on the Relative Strength Index (RSI) as it retains the bearish trend carried over from the end of November; need a bullish break in the oscillator to favor a continuation of the bullish trend.
- Even though the long-term outlook for global equities remain bullish, SPX500 may continue to lag behind its major counterparts as the Fed remains on course to normalize monetary policy in 2015.
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Read More:
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USDCAD Reversal Scalps Pending Below 1.2700 Resistance Ahead of NFPs
USDOLLAR(Ticker: USDollar):
| Index | Last | High | Low | Daily Change (%) | Daily Range (% of ATR) |
|---|---|---|---|---|---|
| DJ-FXCM Dollar Index | 12038.90 | 12074.49 | 12022.39 | -0.15 | 59.26% |
Chart - Created Using FXCM Marketscope 2.0
- Dow Jones-FXCM U.S. Dollar index may face choppy price action going into the U.S. Non-Farm Payrolls (NFP) report as market participation thins ahead of the Easter holiday; long-term structures remain in play.
- Despite expectations for a 245K print along with a 5.5% jobless rate, ongoing weakness in Average Hourly Earnings may dampen the appeal of the greenback as the disinflationary environment drags on interest rate expectations.
- Will continue to watch former support around 11,894 (61.8% retracement) to 11,901 (78.6% expansion) as support, and still need a close above 12,082 (61.8% expansion) to favor a continuation of the bullish trend.
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| Release | GMT | Expected | Actual |
|---|---|---|---|
| Challenger Job Cuts (YoY) (MAR) | 11:30 | -- | 6.4% |
| Initial Jobless Claims (MAR 28) | 12:30 | 286K | 268K |
| Continuing Claims (MAR 21) | 12:30 | 2405K | 2325K |
| Trade Balance (FEB) | 12:30 | -$41.2B | -$35.4B |
| ISM New York (MAR) | 13:45 | 62.0 | 50.0 |
| Factory Orders (FEB) | 14:00 | -0.4% | 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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