Talking Points:
- USDOLLAR Fails to Hold NFP Gain; Range Remains in Focus Ahead of Retail Sales, U. of Michigan Confidence
- USD/CAD Topside Targets Remain in Focus as Bullish Formation Remains in Play.
- NZD/USD Double-Bottom Formation at Risk on Dismal New Zealand, China Data.
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USDOLLAR(Ticker: USDollar):
| Index | Last | High | Low | Daily Change (%) | Daily Range (% of ATR) |
|---|---|---|---|---|---|
| DJ-FXCM Dollar Index | 12023.29 | 12071.17 | 12018.44 | -0.19 | 107.88% |
Chart - Created Using FXCM Marketscope 2.0
- Dow Jones-FXCM U.S. Dollar looks poised to retain the range-bound price action carried over from the previous month amid the ongoing failed attempts to close above 12,049 (78.6% retracement); will retail a constructive view as long as the Relative Strength Index (RSI) preserves the bullish momentum from May.
- The largely in-line U.S. Non-Farm Payrolls (NFP) report should keep the Fed on course to normalize monetary policy in 2015, but may not be enough to secure a September liftoff as wage growth lags behind; will keep a close eye on Retail Sales & the U. of Michigan Confidence survey amid the recent weakness in private-sector consumption.
- The failed attempts to breakout of the near-term range may bring up near-term support around 11,951 (38.2% expansion) to 11,965 (23.6% retracement) in the days ahead.
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Chart - Created Using FXCM Marketscope 2.0
- Despite the recent series of lower highs & lows in USD/CAD, will keep a close eye on the topside targets as long as price & RSI preserve the upward trend from earlier this year, with a break/close above 1.3210 (78.6% expansion) opening the door for 1.3280 (78.6% expansion); will also look for continued closing prices above former resistance around 1.3080 (61.8% expansion) for confirmation.
- The larger-than-expected expansion in Canada Employment may encourage the Bank of Canada (BoC) to endorse a wait-and-see approach, but central bank Governor Stephen Poloz may keep the door open to further reduce the benchmark interest rate amid the growing threat for a technical recession.
- Nevertheless, the DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-short USD/CAD since June 18, with the ratio coming off of recent extremes as it narrows to -2.00 as 33% of traders are now long.
Read More:
Non-Farm Payroll Comes Largely In-Line, Sinks EURUSD
The Weekly Volume Report: What Does OBV Know?
NZD/USD
- NZD/USD appears to be carving a double-bottom formation amid the bullish divergence in the RSI; need a break/close above 0.6690 (161.8% expansion) to 0.6710 (78.6% expansion) to favor a larger correction.
- However, the key developments coming out of the Asia/Pacific region may limit the topside risk for NZD/USD as New Zealand’s 2Q Retail Sales are projected to increase 0.5% after expanding 2.7% during the first three-months of 2015.
- Failure to retain the bullish RSI momentum may spur a further decline in the days ahead, with the next region of interest coming in around 0.6370 (50% retracement) to 0.6400 (61.8% retracement).
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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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