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Talking Points:

- EUR/USD Vulnerable Ahead of ECB Meeting Amid Growing Risk for Deflation

- GBP/USD Rebounds From Channel Support; RSI Holds in Overbought Territory

- USDOLLAR Remains Overbought; Fails to Clear Former Support

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EUR at Risk on Slowing CPI- USDOLLAR Gaps Into Former Support

  • Struggles to fill the opening weekly gap as German IFO Business Confidence survey disappoints; Euro-Zone Consumer Price Index (CPI) in focus ahead of the next European Central Bank (ECB) meeting on September 4.
  • Next key topside region to watch comes in around 105.20 (50.0% expansion) to 105.50 (61.8% retracement), which includes the 2014 high of 105.43.
  • The DailyFX Speculative Sentiment Index (SSI) suggests retail crowd is buying into the opening week gap as the ratio climbs to +2.01.


EUR at Risk on Slowing CPI- USDOLLAR Gaps Into Former Support

  • GBP/USD covers the gap as it rebounds from channel support; need the Relative Strength Index (RSI) to come back from overbought territory to favor a larger correction.
  • Despite the dissent within the Bank of England (BoE), we may not see a larger rift at the September 4 meeting as Ben Broadbent retains a rather dovish tone for monetary policy.
  • Nevertheless, Credit Suisse Overnight Index Swaps (OIS) show market participants are pricing a 50bp rise in the benchmark interest rate over the next 12-months.

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Read More:

Weekly Trading Forecast: Can the Dollar Extend its Bull Trend?

Gold Resumes Descent As USD Bulls Return, Crude Oil Lacking Fuel






Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index






EUR at Risk on Slowing CPI- USDOLLAR Gaps Into Former SupportEUR at Risk on Slowing CPI- USDOLLAR Gaps Into Former Support

Chart - Created Using FXCM Marketscope 2.0

USDOLLAR(Ticker: USDollar):

  • Dow Jones-FXCM U.S. Dollar Index gaps higher as the Fed Economic Symposium spurs speculation for a rate hike sooner rather than later.
  • May fail to push back above support from earlier this year as the RSI remains capped by the 78.
  • Will look for a larger correction once RSI falls back from overbought territory & breaks the bullish trend carried over from July.
  • Interim Resistance: 10,657 (61.8% expansion) to 10,661 (23.6% retracement)
  • Interim Support: 10,555 (50.0% retracement) to 10,561 (100% expansion)

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Chicago Fed National Activity Index (JUL)




Markit Purchasing Manager Index Services (AUG P)




Markit Purchasing Manager Index Composite (AUG P)



New Home Sales (JUL)




New Home Sales (MoM) (JUL)




Dallas Fed Manufacturing Activity (AUG)




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