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Talking Points:

- EUR/JPY at Risk for Lower-High as Focus Turns to ECB & BoJ Meetings

- Waiting for RSI Break on USD/CAD to Favor Downside Targets

- USDOLLAR Remains Overbought Ahead of Non-Farm Payrolls (NFP)

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10539.76

10555.79

10523.34

0.12

124.65%

EUR/JPY:

  • Despite the downturn in risk sentiment, EUR/JPY continues to threaten former support around 137.70-90.
  • Need a turn in the Relative Strength Index (RSI) for confirmation/conviction of a lower-high as it threatens the bearish momentum from earlier this year.
  • European Central Bank (ECB) and Bank of Japan (BoJ) interest rate decisions may set the tone for the August trade as the Governing Council looks to implement more non-standard measures.

USD/CAD:

  • Sits at support from the beginning of the year around 1.0900-20, while the RSI struggles to push into overbought territory.
  • A bearish break in the oscillator should highlight a near-term topping process in the USD/CAD.
  • DailyFX Speculative Sentiment Index shows retail crowd has turned net-short USD/CAD this week as the ratio stands at -1.90.

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EUR/JPY Remains Capped by Former Support; Lower-High in Place?

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Read More:

Price & Time: The Longer-Term Implications of Recent USD Strength

USD/JPY Fueling Broader USD Breakout; EUR/USD Weak Under 1.3400

USDOLLAR Daily

EUR/JPY Remains Capped by Former Support; Lower-High in Place?

Chart - Created Using FXCM Marketscope 2.0

USDOLLAR(Ticker: USDollar):

  • Dow Jones-FXCM U.S. Dollar Index remains overbought as it threatens the next topside objective around 10,555-10,561.
  • Need to see the RSI break down from the bullish trend for a near-term pullback; looks as though a more bullish outlook will take shape as the Fed remains on course to halt its quantitative easing (QE) program in October; when will markets start to price it in?
  • Beyond Non-Farm Payrolls (+231K), we will keep a close eye on Average Weekly Earnings (2.2%) as Chair Janet Yellen continues to highlight the slack in the labor market.
  • Interim Resistance: 10,555 (50.0% retracement) to 10,561 (100% retracement)
  • Interim Support: 10,354 (Oct. low) to 10,375 (50.0& retracement)

Release

GMT

Expected

Actual

Challenger Job Cuts (YoY) (JUL)

11:30

--

24.4%

Employment Cost Index (2Q)

12:30

0.5%

0.7%

Initial Jobless Claims (JUL 26)

12:30

300K

302K

Continuing Claims (JUL 19)

12:30

2492K

2539K

NAPM-Milwaukee (JUL)

13:00

61.00

63.87

Chicago Purchasing Manager (JUL)

13:45

63.0

52.6

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