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USDOLLAR Remains Range-Bound Ahead of Fresh Fed Rhetoric

USDOLLAR Remains Range-Bound Ahead of Fresh Fed Rhetoric

Talking Points:

- USDOLLAR Remains Range-Bound Despite Strong NFP; Outlook Hinges on Fed Rhetoric.

- AUD/USD to Extend Gains on Upbeat Australia Employment Report.

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USDOLLAR(Ticker: USDollar):

IndexLastHighLowDaily Change (%)Daily Range (% of ATR)
US Dollar Index11994.6012037.8111958.99-0.18106.16%
USDOLLAR Daily Chart

Chart - Created by David Song

  • Despite the 287K expansion in U.S. Non-Farm Payrolls (NFP), the USDOLLAR may continue to consolidate in the days ahead as it largely preserves the range carried over from the end of June; will retain a constructive view for the greenback as it breaks out of the downward trend from earlier this year.
  • May see fresh comments from Kansas City Fed President Esther George, Cleveland Fed President Loretta Mester, Fed Governor Daniel Tarullo, St. Louis Fed President James Bullard, Minneapolis Fed President Neel Kashkari, Dallas Fed President Robert Kaplan, Philadelphia Fed President Patrick Harker and Atlanta Fed President Dennis Lockhart may heavily influence the USDOLLAR next week as market participants weigh the outlook for monetary policy, with Fed Funds Futures still highlighting a limited probability for a rate-hike in 2016.
  • Will continue to watch the near-term range in the USDOLLAR as it remains capped by the Fibonacci overlap around 12,049 (78.6% retracement) to 12,064 (61.8% retracement), with support coming in around 11,951 (38.2% expansion) to 11,965 (23.6% retracement).


AUD/USD Daily Chart

Chart - Created by David Song

  • AUD/USD may extend the advance from earlier this month as the Reserve Bank of Australia (RBA) continues to endorse a wait-and-see approach, with the pair carving an upward trend, while the Relative Strength Index (RSI) appears to be following suit as the oscillator carves a bullish formation.
  • With Australia anticipated to add another 10.0K jobs in June, a further improvement in the labor market may heighten the appeal of the Aussie as market participants scale back bets for additional monetary support.
  • Will keep a close eye on the topside targets, with the first hurdle coming in around 0.7580 (50% expansion) to 0.7600 (23.6% retracement) followed by 0.7650 (78.6% retracement).
  • The DailyFX Speculative Sentiment Index (SSI) shows a bit of back and forth in retail sentiment, with the FX crowd flipping back net-short AUD/USD ahead of the U.S. Non-Farm Payrolls (NFP) report.
  • The ratio currently sits at -1.03 as 49% of traders are long, with short positions 2.1% higher from the previous week even as open interest stands 1.6% below the monthly average.

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USD/JPY Technical Analysis: The Proverbial Falling Knife

--- Written by David Song, Currency Analyst

To contact David, e-mail Follow me on Twitter at @DavidJSong.

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.