Talking Points:
- USDOLLAR Technical Outlook Remains Bearish Ahead of FOMC Meeting
- GBP/AUD at Risk for Key Break Going Into RBA, BoE Minutes
- EUR/NZD Rebound to Generate Lower-High; Former Support in Focus
The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is struggling to push back above the 10,470 pivot amid the slew of dismal developments coming out of the world’s largest economy, and the greenback may face further headwinds in the week ahead should the Federal Open Market Committee (FOMC) continue to highlight a dovish tone for monetary policy.
Index | Last | High | Low | Daily Change (%) | Daily Range (% of ATR) |
DJ-FXCM Dollar Index | 10467.38 | 10469.44 | 10442.02 | 0.17 | 82.86% |
Despite expectations for another $10B taper, we may get more of the same with the FOMC’s June 18 interest rate decision as Chair Janet Yellen remains reluctant to move away from the highly accommodative policy stance, but the updated forecasts (growth, inflation & the interest rate) may foster an improved outlook for the reserve currency should we see a growing number of central bank officials show a greater willingness to normalize monetary policy sooner rather than later.
With that said, the dollar may continue to carve lower-highs & lower-lows during the summer months unless we see a material shift in the Fed’s policy outlook, and we will retain a bearish outlook for the reserve currency as the downward trend in the Relative Strength Index (RSI) gathers pace.
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Read More:
Price & Time: Keep A Close Eye on Gold
Pre-Fed Price Action Favors GBP/USD Breakout, EUR/USD Outside Bar
USDOLLAR Daily
Chart - Created Using FXCM Marketscope 2.0
- Bearish RSI Momentum Remains in Focus; 10,470 Pivot to Hold as Resistance?
- 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 |
Producer Price Index (MoM) (MAY) | 12:30 | 0.1% | -0.2% |
Producer Price Index (YoY) (MAY) | 12:30 | 2.4% | 2.0% |
Producer Price Index ex Food and Energy (MoM) (MAY) | 12:30 | 0.1% | -0.1% |
Producer Price Index ex Food and Energy (YoY) (MAY) | 12:30 | 2.3% | 2.0% |
U. of Michigan Confidence (JUN P) | 13:55 | 83.0 | 81.2 |
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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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