EUR/USD Continues to Carve Lower-Highs; Bearish RSI Momentum in Focus
DailyFX.com -
Talking Points:
- EUR/USD Threatens Bearish RSI Momentum; Lower-Highs in Focus.
- USD/JPY Breaks Channel Support- Risks Larger Correction on Risk Aversion.
- USDOLLAR to Extend Losses on Failure to Retain Bullish RSI Structure.
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EUR/USD
Chart - Created Using FXCM Marketscope 2.0
Despite the near-term rebound in EUR/USD, will continue to watch the string of lower highs & lows ahead of the Greek elections, with the first round of votes starting on December 17.
Will keep a close on the Relative Strength Index (RSI) as it comes up against trendline resistance; topside break may threaten the bearish channel formation for EUR/USD dating back in September.
Seeing a material shift in the DailyFX Speculative Sentiment Index (SSI) as retail crowd turns net-short EUR/USD earlier this morning, with the ratio currently standing at -1.27.
USD/JPY
USD/JPY looks poised for a larger pullback as it fails to preserve the bullish formation, while RSI finally falls back from overbought territory.
Japan’s December 14 election remains the key event risk for the Yen, but the lower-yielding currency may continue to outperform against its major counterparts as market participants scale back their appetite for risk/profits.
Will favor the downside targets following the bearish developments, with the next region of interest coming in around the 117.00 handle (61.8% expansion).
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Read More:
Price & Time: The 119.60 Level Looks Critical For USD/JPY
AUDCAD Short Bias Vulnerable- Scalps Target Weekly Opening Range
USDOLLAR(Ticker: USDollar):
Index | Last | High | Low | Daily Change (%) | Daily Range (% of ATR) |
DJ-FXCM Dollar Index | 11415.58 | 11504.08 | 11388.54 | -0.53 | 198.14% |
Chart - Created Using FXCM Marketscope 2.0
Dow Jones-FXCM U.S. Dollar risks a larger decline as RSI struggles to hold in overbought territory; downside break in oscillator to provide conviction/confirmation for a more meaningful correction.
Despite the U.S. data prints, will closely monitor Fed expectations as market participants see the central bank removing the ‘considerable time’ phrase from the forward-guidance for monetary policy.
In light of the failed run at 11,539 (78.6% expansion), will watch former resistance around 11,312 (78.6% retracement) to 11,351 (78.6% expansion) for initial support.
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Release | GMT | Expected | Actual |
NFIB Small Business Optimism (NOV) | 12:30 | 96.5 | 98.1 |
JOLTS Job Openings (OCT) | 15:00 | 4795 | 4834 |
Wholesale Inventories (OCT) | 15:00 | 0.2% | 0.4% |
Wholesale Trade Sales (MoM)(OCT) | 15:00 | 0.1% | 0.2% |
IBD/TIPP Economic Optimism (DEC) | 15:00 | 47.0 | 48.4 |
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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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