Talking Points:
- USDOLLAR Needs Less-Dovish FOMC to Breakout of Bearish Formation
- GBP/AUD Breaks Out; Need Close Above Interim Resistance (1.8130-40)
- EUR/NZD at Risk of Carving Lower-High as New Zealand 1Q GDP Picks Up
The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) rallied to a fresh weekly high (10,480) as the headline reading for U.S. inflation exceeded market expectations, but the Federal Open Market Committee (FOMC) meeting may drag on the greenback should the central bank continue to cast a dovish outlook for monetary policy.
Index | Last | High | Low | Daily Change (%) | Daily Range (% of ATR) |
DJ-FXCM Dollar Index | 10448.84 | 10464.19 | 10441.44 | -0.10 | 70.82% |
In light of the larger-than-expected contraction in 1Q GDP, the updated forecasts (growth, inflation & interest rate) may reflected a greater willingness to maintain the highly accommodative policy stance for an extended period of time, and the dollar may face additional headwinds throughout the summer months as Chair Janet Yellen remains in no rush to normalize monetary policy.
With that said, we will continue to look for lower-highs & lower-lows as long as the bearish RSI momentum remains intact, and will favor ‘selling bounces’ in the greenback should we get more of the same from the FOMC.
Join DailyFX on Demandto Cover Current U.S. dollar Trade Setups
Read More:
Price & Time: Double "Inside Days" in USD/JPY
GBPNZD Weekly Opening Range Play- 1.96 Resistance in Focus
USDOLLAR Daily
Chart - Created Using FXCM Marketscope 2.0
- Downward Trending Channel in Focus Amid Bearish RSI Momentum
- Interim Resistance: 10,602 (38.2 retracement) to 10,615 (78.6 expansion)
- Interim Support: 10,354 to 10,375 (50.0 retracement)
Release | GMT | Expected | Actual |
Consumer Price Index (MoM) (MAY) | 12:30 | 0.2% | 0.4% |
Consumer Price Index (YoY) (MAY) | 12:30 | 2.0% | 2.1% |
Consumer Price Index ex Food & Energy (MoM) (MAY) | 12:30 | 0.2% | 0.3% |
Consumer Price Index ex Food & Energy (YoY) (MAY) | 12:30 | 1.9% | 2.0% |
Consumer Price Index n.s.a. (MAY) | 12:30 | 237.612 | 237.900 |
Consumer Price Index Core Index s.a. (MAY) | 12:30 | 237.592 | 237.776 |
Housing Starts (MAY) | 12:30 | 1030K | 1001K |
Housing Starts (MoM) (MAY) | 12:30 | -3.9% | -6.5% |
Building Permits (MAY) | 12:30 | 1050K | 991K |
Building Permits (MoM) (MAY) | 12:30 | -0.9% | -6.4% |
Click Here for the DailyFX Calendar
--- Written by David Song, Currency Analyst
To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.
To be added to David's e-mail distribution list, please follow this link.
Trade Alongsidethe DailyFX Team on DailyFX on Demand
Looking to use the DailyFX Trade Signals LIVE? Check out Mirror Trader.
New to FX? Watch this Video
Join us to discuss the outlook for the major currencies on the DailyFXForums
original source
