Talking Points:
- USDOLLAR Eyes April High Following Upward GDP Revision- Fed Speeches, NFP in Focus.
- EUR/USD Preserves Monthly Opening Range Ahead of ECB Rhetoric, Slowing Euro-Zone CPI.
- AUD/USD Outlook Mired by China Fears; Looking for Opportunities to Sell-Bounces.
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USDOLLAR(Ticker: USDollar):
| Index | Last | High | Low | Daily Change (%) | Daily Range (% of ATR) |
|---|---|---|---|---|---|
| DJ-FXCM Dollar Index | 12076.59 | 12104.5 | 12058.1 | 0.24 | 92.99% |
Chart - Created Using FXCM Marketscope 2.0
- Dow Jones-FXCM U.S. Dollar climbs to a fresh monthly high of 12,104 following the unexpected upward revision in the 2Q Gross Domestic Product (GDP) report; will keep a close eye on the key data prints on tap next week as current market projections show a 200K rise for U.S. Non-Farm Payrolls (NFP).
- As Fed officials continues to endorse a 2015 rate hike, the near-term resilience in the dollar may gather pace in October; will keep a close eye on the slew of Fed speeches on tap next week as Chair Janet Yellen, Vice-Chair Stanley Fischer, Governor Lael Brainard, New York President William Dudley, Chicago President Charles Evans along with San Francisco President John Williams are on the wires.
- Failure to retain the opening monthly range opens up the topside targets, with the next region of interest coming in around 12,162 (April high) to 12,176 (78.6% expansion).
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EUR/USD
Chart - Created Using FXCM Marketscope 2.0
- Despite the slowdown in the Euro-Zone M3 Money Supply, EUR/USD looks poised to preserve the monthly opening range as market participants continue to treat the Euro as a ‘funding-currency,’ with near-term resistance coming in around 1.1459 (August high) to 1.1500 (23.6% retracement).
- With the Euro-Zone Consumer Price Index (CPI) expected to slow further in September, may see European Central Bank (ECB) President Mario Draghi along with a growing number of Governing Council officials endorse a more dovish outlook for monetary policy as the board struggles to achieve its one and only mandate for price stability.
- DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-short EUR/USD since March 9, but the ratio remains off of recent extremes as it sits at -1.45, with 41% of traders long.
Read More:
Price & Time: Gold Move Signaling Fed Disappointment?
AUDJPY Approaching Monthly Open- Range Break to Determine Scalp Bias
AUD/USD
- Even though AUD/USD preserves the monthly opening range, the pair remains at risk for a further decline as it struggles to hold near-term support levels; key data prints coming out of China (Australia’s largest trading partner) next week may favor the approach to sell-bounces in the aussie-dollar should the developments further dampen the outlook for global growth.
- Growing risks for a slower recovery may put increased pressure on the Reserve Bank of Australia (RBA) to endorse a more dovish outlook for monetary policy at the October 5 interest rate decision.
- Waiting for a close below 0.6950 (161.8% retracement) to 0.6970 (50% expansion) to look for a more meaningful move at 0.6860 (61.8% expansion).
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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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