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USD Tries To Break Out, Time To Buy GBP?

Published 07/14/2014, 01:09 PM
Updated 07/09/2023, 06:31 AM

Talking Points
  • US Dollar Threatens Bearish Setup; Yellen Testimony in Focus
  • GBP/USD Posts Larger Correction Ahead of U.K. CPI; Buy Opportunity?
  • Bullish AUD/USD Formation at Risk as RBA Toughens Verbal Intervention

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10416.31

10421.32

10403.68

0.06

63.73%

US DOLLAR

  • Dow Jones-FXCM U.S. Dollar Index at risk for larger correction as price & RSI fail to maintain bearish trend.
  • With the broader downward trending channel still in play, downside targets remain favorable, while former support around 10,440 (78.6% retracement) may offer near-term resistance.
  • The Humphrey-Hawkins Testimony with Fed Chair Janet Yellen presents the largest event risk for the US DOLLAR; will we get more of the same?

GBP/USD

  • Will continue to look for closing prices above the 1.7100 handle as 1.7060-70 (23.6% retracement) offers intraday support.
  • U.K. Consumer Price Index (CPI) may limit the correction as headline reading for inflation is expected to increase an annualized 1.6% in June.
  • Topside targets remain favorable as price & RSI preserve bullish formations from earlier this year.

AUD/USD

  • May fail to preserve ascending channel formation should the Reserve Bank of Australia (RBA) Minutes highlight recent comments from Governor Glenn Stevens.
  • Near-term support still stands at 0.9330-40; need break and close below to see a move back towards the 0.9200 handle.
  • China 2Q Gross Domestic Product (GDP) will also be a key event risk to watch as the growth rate is expected to expand 1.8% versus 1.4% during the first three-months of 2014.

USD Attempts to Break Out Ahead of Fed Testimony- Time to Buy GBP?

US DOLLAR

USD: Daily

Chart - Created Using FXCM Marketscope 2.0

  • Interim Resistance: 10,508 (61.8% retracement) to 10,524 (38.2% retracement)
  • Interim Support: 10,354 (Oct. low) to 10,375 (50.0& retracement)

--- Written by David Song, Currency Analyst.

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