Talking Points:
- EUR/USD Remains Oversold; Vulnerable to Further Losses on Slowing Inflation
- USD/CAD Bearish Momentum in Focus Ahead of Canada’s 2Q GDP Report
- USDOLLAR Pares Losses on Upward Revision to 2Q GDP; RSI Struggling to Hold Bullish Trend
For more updates, sign up for David's e-mail distribution list.
EUR/USD
- May fail to close the opening weekly gap ahead of the European Central Bank (ECB) on September 4 as Relative Strength Index (RSI) holds in oversold territory.
- May see growing speculation for additional monetary support should the Euro-Zone Consumer Price Index (CPI) highlight a greater threat for deflation.
- The DailyFX Speculative Sentiment Index (SSI) continues to warn of a further decline in the EUR/USD as retain crowd is turning increasing net-long on the pair, with the ratio standing at 1.96.
USD/CAD
- Looks as though the USD/CAD will hold above 1.0820 (61.8% retracement) to 1.0830 (61.8% retracement) ahead of Canada’s 2Q GDP, which is expected to show a 2.7% rise in the growth rate.
- May see the Bank of Canada (BoC) come under increased pressure to adopt a more hawkish tone for monetary policy at the September 3 meeting should the 2Q GDP report raise the outlook for growth and inflation.
- Next downside objective comes in around 1.0780 (38.2% expansion) to 1.0790 (50.0% retracement).
Join DailyFX on Demand for Real-Time SSI Updates Across the Majors!
Read More:
Price & Time: In Search of A Low in the Euro Next Week
Sharp CAD Reversal Negates USD/CAD Bull Flag, Stuns EUR/CAD, GBP/CAD
USDOLLAR
Index | Last | High | Low | Daily Change (%) | Daily Range (% of ATR) |
DJ-FXCM Dollar Index | 10633.66 | 10639.95 | 10616.12 | -0.04 | 81.91% |
Chart - Created Using FXCM Marketscope 2.0
USDOLLAR(Ticker: USDollar):
- Dow Jones-FXCM U.S. Dollar Index rebounds from a fresh weekly low of 10,616 as the advance 2Q GDP report shows an unexpected upward to 4.2% from an initial forecast of 4.0%, marking the fastest pace of growth since 3Q 2013.
- Core Personal Consumption Expenditure (PCE) continues to highlight sticky inflation as it shows the highest reading since 1Q 2012; will it be enough to shift the Fed’s forward-guidance for monetary policy?
- Still waiting for a break of the bullish RSI momentum to favor a larger USDOLLAR correction; former resistance around 10,555 (50.0% retracement) to 10,561 (100% expansion) remains in focus.
Join DailyFX on Demand for Real-Time SSI Updates!
Release | GMT | Expected | Actual |
Gross Domestic Product (Annualized) (2Q S) | 12:30 | 3.9% | 4.2% |
Personal Consumption (2Q S) | 12:30 | 2.4% | 2.5% |
Gross Domestic Product Price Index (2Q S) | 12:30 | 2.0% | 2.1% |
Core Personal Consumption Expenditure (QoQ) (2Q S) | 12:30 | 2.0% | 2.0% |
Initial Jobless Claims (AUG 23) | 12:30 | 300K | 298K |
Continuing Claims (AUG 16) | 12:30 | 2510K | 2527K |
Pending Home Sales (MoM) (JUL) | 14:00 | 0.5% | 3.3% |
Pending Home Sales (YoY) (JUL) | 14:00 | -3.5% | -2.7% |
Kansas City Fed Manufacturing Activity (AUG) | 15:00 | 7 | 3 |
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
