Talking Points:
- USD/JPY Retains Bearish Formation Ahead of Bank of Japan (BoJ) Policy Meeting on Risk Aversion.
- NZD/USD Preserves Downward Trending Channel Ahead of New Zealand’s 3Q GDP Report.
- USDOLLAR Outlook Hinges on FOMC’s Forward-Guidance for Monetary Policy.
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USD/JPY
Chart - Created Using FXCM Marketscope 2.0
- USD/JPY continues to threaten channel resistance, while the Relative Strength Index (RSI) appears to be breaking out of the near-term bearish momentum ahead of the Bank of Japan (BoJ) interest rate decision on December 19.
- Despite expectations of seeing the BoJ retain a dovish tone for monetary policy, may see the Japanese Yen continue to follow broader risk trends as market participation wanes going into the end of the year.
- DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-long USD/JPY since December 8, with the ratio currently holding at +1.41.
NZD/USD
- NZD/USD may continue to carve lower highs & lows over the remainder of the week as New Zealand’s 3Q GDP report is expected to show another 0.7% expansion; may need stronger growth to fuel interest rate expectations.
- Despite the verbal intervention on the kiwi, may see the Reserve Bank of New Zealand (RBNZ) stay on course to further normalize monetary policy in 2015 should the economic recovery gather pace.
- A close below 0.7710-20 (38.2% expansion) may spur a test of the December low (0.7607), with the next key downside objective coming in around 0.7520 (61.8% expansion).
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Read More:
FOMC Preview and Trade Setups in EUR/USD, USD/JPY, AUD/USD
Price & Time: GBP/USD Trying to Break From the Range?
USDOLLAR(Ticker: USDollar):
Index | Last | High | Low | Daily Change (%) | Daily Range (% of ATR) |
DJ-FXCM Dollar Index | 11447.66 | 11450.3 | 11383.24 | 0.57 | 106.63% |
Chart - Created Using FXCM Marketscope 2.0
- Dow Jones-FXCM U.S. Dollar to take cues from the Fed’s updated economic projections/forward-guidance as market participants anticipate the first rate-hike in mid-2015.
- Beyond the impact on the USDOLLAR, may see a further decline in risk appetite should the Federal Open Market Committee (FOMC) remove the ‘considerable time’ phrase & show a greater willingness to remove the zero-interest rate policy (ZIRP).
- With USDOLLAR holding above the former resistance zones around 11,312 (78.6% retracement) to 11,351 (78.6% expansion), close above 11,453 may highlight a further advance in the greenback.
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Release | GMT | Expected | Actual |
Consumer Price Index (MoM) (NOV) | 13:30 | -0.1% | -0.3% |
Consumer Price Index (YoY) (NOV) | 13:30 | 1.4% | 1.3% |
Consumer Price Index ex Food and Energy (MoM) (NOV) | 13:30 | 0.1% | 0.1% |
Consumer Price Index ex Food and Energy (YoY) (NOV) | 13:30 | 1.8% | 1.7% |
Consumer Price Index n.s.a. (NOV) | 13:30 | 239.485 | 239.332 |
Consumer Price Index Core s.a. (NOV) | 13:30 | 236.369 | 236.151 |
Current Account balance (3Q) | 13:30 | -$97.5B | -$100.3B |
Federal Open Market Committee Interest Rate Decision | 19:00 | 0.25% | |
Fed Chair Janet Yellen Holds Press Conference | 19:30 |
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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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