Bearish USD Sentiment Remains

Talking Points

• US DOLLAR Threatens Bearish Setup; Yellen Testimony in Focus
• GBP/USD Benefits From U.K. CPI; Higher-Low in Place?
• NZD/USD to Eye Fresh Record Highs on Strong 2Q CPI, China 2Q GDP

Index	Last	High	Low	Daily Change (%)	Daily Range (% of ATR)
DJ-FXCM Dollar Index	10430.51	10432.41	10400.5	0.12	114.10%

US DOLLAR

• Dow Jones-FXCM U.S. Dollar Index struggling to hold gains as Fed Chair Janet Yellen retains a dovish tone for monetary policy at the Humphrey-Hawkins Testimony.
• Seems Chair Yellen remains in no rush to normalize monetary policy as the central bank head continues to highlight slack in labor market, subdued wages and the weakness in housing.
• Will retain the bearish outlook for the US DOLLAR as U.S. Retail Sales, Yellen Testimony fails to prop up interest rate expectations.

GBP/USD

• Bullish outlook remains favorable as price & the Relative Strength Index (RSI) retain the bullish trend from earlier this year.
• Appears to have carved a higher-low around 1.7065 (23.6% Fibonacci retracement) as stronger inflation raises bets for Bank of England (BoE) rate hike.
• With U.K. Jobless Claims expected to contract another 27.0K in June, a positive market reaction may trigger a more meaningful run at the 1.7200 pivot, followed by confluence of Fibonacci expansions around 1.7220-30.

NZD/USD

• New Zealand dollar may trade to fresh record-highs over the next 24-hours of trade as New Zealand inflation is expected to pick up, while China GDP figures are anticipated to show a faster rate of growth for the second-quarter.
• The 2011 high (0.8841) remains the key topside level to watch followed by the 0.8850 region (61.8% Fib expansion) ahead of the Reserve Bank of New Zealand (RBNZ) policy meeting on July 23.
• Credit Suisse Overnight Index Swaps (OIS) shows market participants are pricing a 91% chance for a 25bp rate hike next week.

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)

Release	GMT	Expected	Actual
Advance Retail Sales (JUN)	12:30	0.6%	0.2%
Advance Retail Sales ex Autos (JUN)	12:30	0.5%	0.4%
Advance Retail Sales ex Auto and Gas (JUN)	12:30	0.5%	0.4%
Advance Retail Sales Control Group (JUN)	12:30	0.5%	0.6%
Empire Manufacturing (JUL)	12:30	17.00	25.60
Import Price Index (MoM) (JUN)	12:30	0.4%	0.1%
Import Price Index (YoY) (JUN)	12:30	1.1%	1.2%
Business Inventories (MAY)	14:00	0.6%
Fed Chair Janet Yellen Testifies to Senate Committee	14:00

--- Written by David Song, Currency Analyst