News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bullish
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • Indices Update: As of 19:00, these are your best and worst performers based on the London trading schedule: France 40: -0.06% US 500: -0.07% Germany 30: -0.08% Wall Street: -0.15% FTSE 100: -0.16% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/I4XjECGhDZ
  • Heads Up:🇺🇸 Fed Beige Book due at 19:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-12-02
  • Looks like the President will be supporting the drive for the GOP to keep the Senate after all. The most prominent market-risk in the ongoing government transition for me at present https://t.co/5bRDov51wU
  • Fed's Williams: We are still in a very deep recession. Economy was recovering more strongly than expected until recently #Fed $SPX
  • US-EU renew push to settle Boeing-Airbus subsidy dispute Coupled with their first airworthiness certificate for some 737 Max's it seems $BA is on a win streak as of late
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 94.27%, while traders in EUR/USD are at opposite extremes with 72.62%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/21vl2I6Cd0
  • Heads Up:🇺🇸 Fed Williams Speech due at 18:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-12-02
  • RT @morkthepork1: EUR/USD chart... https://t.co/74pCtGWMhG
  • Commodities Update: As of 17:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 2.72% Gold: 0.64% Silver: -0.34% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/cDBYI4Cs3l
  • Forex Update: As of 17:00, these are your best and worst performers based on the London trading schedule: 🇨🇭CHF: 0.41% 🇦🇺AUD: 0.32% 🇪🇺EUR: 0.16% 🇳🇿NZD: -0.08% 🇯🇵JPY: -0.17% 🇬🇧GBP: -0.53% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/iTaNKjvNPi
USD Index Closes January Above Key Support- Look Higher in February

USD Index Closes January Above Key Support- Look Higher in February

2012-01-31 22:38:00
Michael Boutros, Strategist
Share:
USD_Index_Closes_January_Above_Key_Support-_Look_Higher_in_February_body_Picture_2.png, USD Index Closes January Above Key Support- Look Higher in FebruaryUSD_Index_Closes_January_Above_Key_Support-_Look_Higher_in_February_body_Picture_3.png, USD Index Closes January Above Key Support- Look Higher in February

The greenback is slightly softer at the close of North American trade with the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) off by a fractional 0.9% on the session. Risk appetite quickly subsided at the open after weaker than expected US economic data saw risk assets come off sharply as the dollar pulled back above key support at 9755. Weakness in the housing market continues to loom over the economy with today’s Case-Shiller home price report showing that home prices had fallen 3.67% y/y in November, topping expectations for a decline of 3.30% y/y. Consumer confidence data followed with the January print grossly missing consensus estimates with a print of 61.1, down from a previous read of 64.8. Markets were anticipating an eleven month high print of 68.0 for the month of January. US equity markets promptly reversed gains with the major indices closing mixed on the session after spending the bulk of the day paring losses with the Dow and the S&P off by 0.16% and 0.05% while the NASDAQ eked out a marginal gain of 0.07%.

The dollar briefly broke below key support at the 38.2% Fibonacci extension taken from the August 1st and October 27th troughs at 9756. This level remains paramount for the reserve currency with a break below here risking substantial losses as we head into February. While we noted yesterday that the daily relative strength index looked to be reversing course after breaking below RSI trendline support dating back to May 2nd, the oscillator has since flat lined, providing us little in the way of directional bias. That being said, as seasonality trends dictate we look for renewed dollar strength in early February noting that a break below key support eyes the 200-day moving average just above 9700 with topside targets held at the 50% extension at 9850.

USD_Index_Closes_January_Above_Key_Support-_Look_Higher_in_February_body_Picture_4.png, USD Index Closes January Above Key Support- Look Higher in February

An hourly chart shows the index continuing to trade within the confines of a descending channel formation dating back to January 15th. A failed test of channel resistance in intra-day trade saw the index settle above the key 38.2% extension at 9756. A topside break above 9780 eyes subsequent resistance targets at 9820, the 50% extension at 9850, and 9920. Should this channel formation hold over the next 24-48 hours, look for support lower at 9730, 9700 and 9675.

USD_Index_Closes_January_Above_Key_Support-_Look_Higher_in_February_body_Picture_5.png, USD Index Closes January Above Key Support- Look Higher in February

The greenback declined against three of the four component currencies highlighted by a 0.29% decline against the British pound, which was the topic for today’s Scalp Report. The pound has now rallied eleven of the past twelve sessions with the sterling rebounding off key Fibonacci resistance just shy of the 1.58-handle. This level remains a crucial cap to further topside advances with a breach here exposing significant risk to the dollar. The euro was the worst performer of the lot with a decline of nearly 0.50% against the dollar as ongoing concerns regarding stalled Greek PSI talks weighed on demand for the single currency. The pair broke below channel support dating back to the January 15th lows in intra-day trade with the euro now risking further downside moves eying subsequent support targets at 1.3040 and the 1.30-figure.

Tomorrow’s US economic docket is highlighted by the January ISM manufacturing report, the ADP employment report, and December construction spending. Often used as a pre-cursor to the more encompassing non-farm payroll report which is released on Friday, the ADP employment change is expected to show the addition of 185K private sector jobs in January. While the data has often missed substantial spikes in NFP prints, traders will be undoubtedly looking for a strong read ahead of Friday’s crucial print. The ISM manufacturing report is released soon after with estimates calling for a print of 54.5, up from a previous read of 53.9 as the manufacturing sector continues to show signs of improvement. The pace of growth in construction spending is widely expected to soften further with the street eyeing a print of 0.5% m/m, down from previous read of 1.2% m/m. The data would further reinforce recent data out of the housing sector, suggesting the market remains on shaky ground as house prices and pending/existing home sales fell in December. The data has the capacity to further weigh on broader market sentiment after a string of better than expected data over the past few weeks continued to prop up the risk trade. Look for the dollar to move higher as investors go back on the defensive with the dollar acting as the chief beneficiary of risk aversion flows.

Upcoming Events

Date

GMT

Importance

Release

Expected

Prior

2/1

13:15

MEDIUM

ADP Employment Change (JAN)

185K

325K

2/1

15:00

MEDIUM

Construction Spending (MoM) (DEC)

0.5%

1.2%

2/1

15:00

HIGH

ISM Manufacturing (JAN)

54.5

53.9

2/1

15:00

MEDIUM

ISM Prices Paid (JAN)

49.5

47.5

2/1

22:00

LOW

Domestic Vehicle Sales (JAN)

10.50M

10.45M

2/1

22:00

LOW

Total Vehicle Sales (JAN)

13.60M

13.52M

--- Written by Michael Boutros, Currency Strategist with DailyFX.com

To contact Michael email mboutros@dailyfx.comor follow him on Twitter @MBForex.

To be added to Michael’s email distribution list, send an email with subject line “Distribution List” to mboutros@dailyfx.com

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

DISCLOSURES