Talking Points:
- USDOLLAR Slammed by Dovish Fed Chair Janet Yellen; ADP Employment on Tap.
- USD/CAD Disconnects With Oil; Risks Further Losses on Upbeat BoC.
USDOLLAR(Ticker: USDollar):
| Index | Last | High | Low | Daily Change (%) | Daily Range (% of ATR) |
|---|---|---|---|---|---|
| DJ-FXCM Dollar Index | 11920.83 | 12009.77 | 11919.76 | -0.55 | 142.27% |
Chart - Created Using FXCM Marketscope 2.0
- Despite the better-than-expected U.S. Consumer Confidence survey, the USDOLLAR may continue to give back the rebound from earlier this month as Fed Chair Janet Yellen highlights a dovish outlook for monetary policy and keeps the door open to implement another round of quantitative easing (QE) if needed.
- Even though the ADP Employment report is expected to show another 197K expansion in March, the down turn in interest-rate expectations may continue to dampen the appeal of the greenback as market participants continue to gauge the timing of the next rate-hike.
- With USDOLLAR pushing back below 12,050 (78.6% retracement) to 12,082 (61.8% expansion), a close below this region may open up the next downside target 11,898 (50% retracement) to 11,901 (78.6% retracement).
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Chart - Created Using FXCM Marketscope 2.0
- USD/CAD may resume the decline from earlier this year as the pair fails to preserve the ascending channel formation from the monthly low (1.2922), with the Relative Strength Index (RSI) largely following suit.
- Fresh comments from Bank of Canada (BoC) Deputy Governor Lynn Patterson may boost the appeal of the loonie and spur a further decline in USD/CAD should the central bank official endorse an improved outlook for the region and show a greater willingness to move away from the easing cycle.
- Failed attempt to push back above 1.3280 (78.6% expansion) to 1.3320 (38.2% expansion) raises the risk for a further decline, with the next downside target coming in around 1.2930 (61.8% expansion), followed by the 1.2800 handle (38.2% expansion).
- The DailyFX Speculative Sentiment Index (SSI) shows the retail FX crowd remains net-long USD/CAD since February 25, with the ratio hitting a near-term extreme earlier this month as it climbed just shy of +2.00.
- Despite fresh weekly lows in USD/CAD, the ratio currently stands at +1.31 as 57% of traders remain long, with long positions 4.4% higher from the previous week.
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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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