Talking Points:
- EUR/USD Outlook Weighed as EU Tries to Buy More Time For Greece.
- GBP/USD Threatens Bearish Channel Ahead of BoE Inflation Report..
- USDOLLAR Outlook Vulnerable to Further Contraction in Retail Sales.
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EUR/USD
Chart - Created Using FXCM Marketscope 2.0
- EUR/USD remains vulnerable as Greece struggles to secure a bailout agreement with the EU; may put increased pressure on the European Central Bank (ECB) to further support the monetary union as policy makers struggle to meet on common ground.
- Will retain a bearish outlook for EUR/USD as long as the Relative Strength Index (RSI) preserves the downward trend dating back to October 2013.
- DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-short EUR/USD, but seeing the ratio narrow as it currently stands at -1.56.
GBP/USD
- GBP/USD making another assault at channel resistance ahead of the Bank of England (BoE) inflation report; remains at risk for a larger rebound as the RSI has already broken out of the bearish momentum.
- There’s growing speculation the BoE may further reduce its inflation forecast, but will keep a close eye on the forward-guidance for monetary policy as Governor Mark Carney continues to prepare U.K. households and businesses for higher borrowing-costs.
- Will keep a close eye on the opening range, with the key region of interest coming in around the former support zone near 1.5500-10.
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USDOLLAR(Ticker: USDollar):
Index | Last | High | Low | Daily Change (%) | Daily Range (% of ATR) |
DJ-FXCM Dollar Index | 11873.83 | 11877.34 | 11827.79 | 0.31 | 74.66% |
Chart - Created Using FXCM Marketscope 2.0
- Dow Jones-FXCM U.S. Dollar may retain the monthly opening range as U.S. Advance Retail Sales are expected to contract another 0.4% contraction in January.
- A further downturn in household spending may dampen the Fed’s scope to normalize monetary policy in mid-2015 as lower energy prices fail to boost private-sector consumption.
- Will continue to watch the broader range from 11,721 (38.2% expansion) to 11,901 (78.6% expansion).
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Release | GMT | Expected | Actual |
MBA Mortgage Applications (FEB 6) | 12:00 | -- | -9.0% |
Fed’s Richard Fisher Speaks on U.S. Economy | 13:00 | ||
Monthly Budget Statement | 19:00 | -$19.0B |
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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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