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.

Free Trading Guides
EUR/USD
Mixed
Oil - US Crude
Bearish
Wall Street
Bearish
Gold
Mixed
GBP/USD
Bullish
USD/JPY
Mixed
More View more
Real Time News
  • US Treasury Secretary Steven Mnuchin to hold call with G-7 finance ministers on Wednesday per his public schedule $DXY
  • Overlay that with google search terms for “protest” and “riots” and you see a similar uptick. Last time we saw a surge in these search terms was back in August 2019 and we saw a lot of volatility ensue shortly after. https://t.co/ZXAkgRWfAB
  • Forex Update: As of 14:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 1.48% 🇳🇿NZD: 1.14% 🇨🇦CAD: 0.98% 🇯🇵JPY: 0.20% 🇪🇺EUR: 0.19% 🇨🇭CHF: 0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/q8shAF6mG4
  • #IBEx35: a punto de romper el rango para situarse en los niveles previos a la crisis #trading https://t.co/H9DbLtpdox
  • Indices Update: As of 14:00, these are your best and worst performers based on the London trading schedule: Germany 30: 2.12% FTSE 100: 1.61% France 40: 1.56% Wall Street: 0.42% US 500: 0.37% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/M3rd9RjKa0
  • EUR/JPY Forecast: Euro vs JPY Price Flirts With 120.00 Threshold More details in the link: https://www.dailyfx.com/forex/technical/home/analysis/eur-jpy/2020/06/01/EURJPY-Forecast-Euro-vs-JPY-Price-Flirts-With-120.00-Threshold-MK.html?CHID=9&QPID=917714 https://t.co/Hh9ZAi5YX4
  • 🇲🇽 Markit Manufacturing PMI Actual: 38.3 Previous: 35 https://www.dailyfx.com/economic-calendar#2020-06-01
  • Commodities Update: As of 14:00, these are your best and worst performers based on the London trading schedule: Silver: 1.73% Gold: 0.30% Oil - US Crude: -0.96% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/yeKhOfigUX
  • Heads Up:🇲🇽 Markit Manufacturing PMI due at 14:30 GMT (15min) Previous: 35 https://www.dailyfx.com/economic-calendar#2020-06-01
  • The Nasdaq 100 is approximately the equivalent of one-day ATR (10-day average) from record highs
USD at July Highs as Dow Falls for 6th Straight Day- China GDP on Tap

USD at July Highs as Dow Falls for 6th Straight Day- China GDP on Tap

2012-07-12 21:10:00
Michael Boutros, Strategist
Share:
USD_at_July_Highs_as_Dow_Falls_for_6th_Straight_Day-_China_GDP_on_Tap_body_Picture_4.png, USD at July Highs as Dow Falls for 6th Straight Day- China GDP on TapUSD_at_July_Highs_as_Dow_Falls_for_6th_Straight_Day-_China_GDP_on_Tap_body_Picture_3.png, USD at July Highs as Dow Falls for 6th Straight Day- China GDP on Tap

The greenback is firmer at the close of North American trade with the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) advancing 0.29% on the session after moving nearly 100% of its daily average true range. The gains come on the back of yet another sell-off in equity markets which spent the majority of the session struggling to pare early losses. Sentiment remains fragile after yesterday’s FOMC minutes failed to impress investors who were eagerly anticipating a shift in the committee in favor of more easing from the central bank. Markets remain on edge ahead of tonight’s 2Q Chinese GDP print with consensus estimates calling for a read of 7.7% y/y, down from a previous print of 8.1% y/y. The data would mark the lowest read on Chinese growth since 2Q of 2009 and could further fuel the recent sell-off in risk. It’s important to note however that bearish sentiment with regards to this print has prevailed throughout the week and a stronger than expected read could see markets pare a portion of the week’s decline. All three major stock indices were in the red at the close of trade in New York with the Dow, the S&P and NASDAQ off by 0.25%, 0.50% and 0.75% respectively.

The dollar broke above daily resistance at the 78.6% Fibonacci extension taken from the October and February troughs at 10,180 before encountering resistance at the 10,220 soft target. Note that the break above the June 28th highs at 10,193 represents a breach above the neckline of an inverted head-and-shoulders formation with topside resistance targets eyed at 10,270 and the 100% extension at 10,318. Daily support remains below the weekly lows at 10,134 which represent the October highs. This level now remains paramount with a break below risking a pullback to the key 61.8% extension at 10,072. Daily RSI now eyes a breach above the 60-mark, with such a scenario offering further conviction on our directional bias.

USD_at_July_Highs_as_Dow_Falls_for_6th_Straight_Day-_China_GDP_on_Tap_body_Picture_2.png, USD at July Highs as Dow Falls for 6th Straight Day- China GDP on Tap

An hourly scalp chart shows the index rebounding off the 100% Fibonacci extension taken from the June 20th and 29th troughs at 10,216 before closing just above soft support at 10,200. The dollar has continued to trade within the confines of an ascending channel formation with a breach above interim resistance eyeing subsequent targets at 10,235, the 123.6% extension at 10,255 and 10,270. A move below the 78.6% extension at 10,180 invalidates the head-and-shoulders formation with such a scenario eyeing subsequent floors at the 61.8% extension at 10,152, 10,132 and the 38.2% extension at 10,112.

USD_at_July_Highs_as_Dow_Falls_for_6th_Straight_Day-_China_GDP_on_Tap_body_Picture_1.png, USD at July Highs as Dow Falls for 6th Straight Day- China GDP on Tap

The greenback advanced against three of the four component currencies highlighted by a 1.07% advance against the Australian dollar. Disappointing employment data and a continued risk-off environment have weighed heavily on the aussie which broke below the channel support dating back to June 1st in overnight trade. Look for the pair to remain under pressure as expectations for more easing from the RBA take root with Credit Suisse overnight swaps now factoring in a 71% chance of a 25 basis point cut at the next policy meeting. We maintain our bearish outlook on the AUDUSD ahead of tonight’s Chinese data with interim daily targets eyed at the 38.2% retracement taken form the February decline at 1.0070.

The Japanese yen is the top performer of the lot with an advance of 0.61% as real positive interest rates in Japan increase the appeal of the yen as a store of wealth amid growing uncertainties with regards to global growth prospects. Look for the USDJPY to encounter support at the 200-day moving average just above the 79-figure, with a break below this mark risking a more substantial pullback to the June 15th low at 78.60. We closed out our long position yesterday for a gain of just 20pips amid the ongoing risk sell-off with the current pullback offering favorable long positioning below the 79-handle. With QE hopes subsiding, look for broader market sentiment to drive price action with tonight’s data release likely spark added volatility in dollar based pairs.

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

Review today’s Scalp Webinar for further insight on the USDOLLAR and other current setups

To contact Michael email mboutros@dailyfx.com or follow him on Twitter @MBForex for the latest charts and commentary

To be added to Michael’s distribution list, send an email with the subject line “Distribution List”

Introduction to Scalping for Beginners Webinar

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

DISCLOSURES

News & Analysis at your fingertips.