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Talking Points:

- GBP/USD Climbs to Fresh Monthly High on Hawkish Bank of England (BoE) Minutes.

- AUD/USD Holds April High (0.7841) Despite Stronger-Than-Expected Australia Core CPI.

- USDOLLAR Remains at Risk as Fed Liftoff Remains ‘Uncertain.’

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GBP/USD

GBP/USD Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • GBP/USD marks fresh monthly high (1.5078) as Bank of England (BoE) warns of faster inflation on the back of the depreciation in the exchange rate & warns interest rate expectations are ‘exceptionally flat.’
  • Despite the unanimous vote, BoE may show a greater willingness to normalize monetary policy following the May 7 election amid the uncertainty surrounding the fiscal outlook; close above 1.5000-15 (50% expansion) raises the risk for a larger correction in GBP/USD.
  • Seeing increased volatility in the DailyFX Speculative Sentiment Index (SSI) following the BoE Minutes as retail crowd flips net-short GBP/USD, with ratio currently holding at -1.13.

AUD/USD

AUD/USD Daily Chart
  • Lack of momentum to test the April high (0.7841) following the stronger-than-expected print for Australia’s core Consumer Price Index (CPI) may generate range-bound prices in AUD/USD.
  • Need a close above 0.7820 (38.2% retracement) to 0.7860 (61.8% expansion) to favor a further advance in the aussie, but the pair may continue to consolidate ahead of the Reserve Bank of Australia’s (RBA) May 5 policy meeting amid speculation for a rate cut.
  • Close below 0.7570 (50% expansion) to 0.7590 (100% expansion) along with a break of the bullish RSI momentum to favor a resumption of the long-term bearish trend.

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Read More:

Price & Time: USD Vulnerable?

GBPCAD Testing Slope Resistance- Long Scalps at Risk Sub 1.84

USDOLLAR(Ticker: USDollar):

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

11996.59

12024.88

11958.09

-0.17

95.42%

GBP/USD Close Above 1.5000 to Generate Larger Rebound on Hawkish BoEUSDOLLAR Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • Dow Jones-FXCM U.S. Dollar may continue to face range bound prices ahead of the U.S. Durable Goods report amid the ongoing closes above 11,951 (38.2% expansion) to 11,952 (50-Day SMA).
  • Despite the better-than-expected housing data prints from earlier this morning, the minor improvements may not be enough to generate a majority vote for a Fed rate hike in June.
  • Downside risk remains as the RSI retains the bearish momentum, with key support standing around 11,869 (23.6% expansion) to 11,901 (78.6% expansion).

Release

GMT

Expected

Actual

MBA Mortgage Applications (APR 17)

11:00

--

2.3%

FHFA House Price Index (MoM) (FEB)

13:00

0.5%

0.7%

Existing Home Sales (MAR)

14:00

5.03M

5.19M

Existing Home Sales (MoM) (MAR)

14:00

3.1%

6.1%

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.

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