Talking Points:
- Euro Rebound at Risk on Dovish European Central Bank (ECB) Rhetoric.
- GBP/USD Continues to Carve Bearish Pattern Ahead of BoE Meeting.
- USDOLLAR Resilience Continues as Fed Officials Highlight 2015 Liftoff.
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Chart - Created Using FXCM Marketscope 2.0
- Failure to preserve the downward trending channel from the May high (1.1465) may highlight a near-term consolidation in EUR/USD; with the ongoing closes above 1.0850 (78.6% expansion) to 1.0870 (38.2% retracement), may see a move back towards former support around 1.1120 (61.8% retracement).
- Will keep a very close eye on the fresh batch of rhetoric coming out of the European Central Bank (ECB) as the Governing Council is widely expected to retain its current policy; may see President Mario Draghi pledge to carry out the quantitative easing (QE) program until at least September 2016.
- DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-short EUR/USD since March 9, with the ratio currently sitting at -1.77 going into June.
GBP/USD
- GBP/USD remains at risk for a further decline as it fails to retain the bullish formation carried over from April & continues to carve a series of lower highs & lows going into the end of the month.
- With the Bank of England (BoE) anticipated to retain a wait-and-see approach in June, may see a limited market reaction should the central bank refrain from releasing a policy statement.
- In turn, the descending channel in the exchange rate favors the downside target for GBP/USD, with the next level of interest coming in around 1.5180 (23.6% retracement) to 1.5190 (50% retracement).
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Read More:
Price & Time: GBP/USD Bucking the Trend?
USDJPY Breakout Testing Initial Resistance Ahead of U.S. GDP
USDOLLAR(Ticker: USDollar):
| Index | Last | High | Low | Daily Change (%) | Daily Range (% of ATR) |
|---|---|---|---|---|---|
| DJ-FXCM Dollar Index | 11986.61 | 12003.46 | 11971.09 | -0.02 | 49.14% |
Chart - Created Using FXCM Marketscope 2.0
- Ongoing closes above 11,960 (61.8% retracement) will continue to favor the topside targets for the Dow Jones-FXCM U.S. Dollar as the bullish formation continue to take shape.
- Despite mixed results of the 1Q Gross Domestic Product (GDP) report, the slew of key data prints going into the highly anticipated Non-Farm Payrolls (NFP) report may play a greater role in dictation the dollar as well as the Fed outlook as the central bank pledges to look past the weakness during the first three-months of 2015.
- String of higher-lows in USDOLLAR continues to put 12,049 (78.6% retracement) on the radar.
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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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