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Talking Points:

- EUR/USD to Target 1.3200-20 on Dovish Comments From ECB President Mario Draghi

- USD/JPY Stalls Ahead of 104.00; Doji Warns of Waning Momentum

- USDOLLAR Risks Larger Decline Ahead of Fed Symposium as RSI Stalls at 78 Resistance

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EUR/USD

EUR/USD Vulnerable to Dovish Draghi- USD/JPY Carving Doji?

  • Despite marking a fresh monthly low of 1.3240, the Relative Strength Index (RSI) appears to be carving a higher-low; European Central Bank (ECB) President is scheduled to speak at the Fed Symposium on Friday at 18:30 GMT.
  • More dovish comments from the ECB raises the risk for a further decline and may generate a move into 1.3200 (100% expansion) to 1.3220 (61.8% retracement).
  • The DailyFX Speculative Sentiment Index (SSI) continues to show retail crowd remains net-long on the EUR/USD as the ratio stands at +1.79.

USD/JPY

EUR/USD Vulnerable to Dovish Draghi- USD/JPY Carving Doji?

  • Struggles to test the April high (104.11) despite the first overbought RSI reading since December; may face a near-term pullback should the oscillator slip below 70.
  • At the same time, if a doji materializes on the USD/JPY, could warn of a larger correction as it straddles channel resistance.
  • Nevertheless, we will retain our approach to ‘buy dips’ in the USD/JPY as it carves a new series of higher highs & lows.

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Read More:

Price & Time: NOK Bucks the Trend

EUR/USD Slide Continues but EUR Weakness Elsewhere Questionable

USDOLLAR

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10626.23

10652.33

10619.72

-0.06

105.37%

EUR/USD Vulnerable to Dovish Draghi- USD/JPY Carving Doji?

EUR/USD Vulnerable to Dovish Draghi- USD/JPY Carving Doji?

Chart - Created Using FXCM Marketscope 2.0

USDOLLAR(Ticker: USDollar):

  • Dow Jones-FXCM U.S. Dollar Index climbs to a fresh monthly high of 10,616 after closing above the key 10,590 pivot, with the RSI pushing back into overbought territory.
  • May see former support (10,615) act as new resistance, especially if the Federal Open Market Committee (FOMC) Minutes fail to prop up interest rate expectations.
  • Need a bearish break in the RSI to look for a more meaningful USDOLLAR correction.
  • Interim Resistance: 10,602 (38.2% retracement) to 10,615 (78.6% expansion)
  • Interim Support: 10,440 (78.6% retracement) to 10,450 Pivot

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Release

GMT

Expected

Actual

Initial Jobless Claims (AUG 16)

12:30

303K

298K

Continuing Claims (AUG 9)

12:30

2520K

2500K

Markit Purchasing Manager Index Manufacturing (AUG P)

13:45

55.7

58.0

Philadelphia Fed. (AUG)

14:00

19.7

28.0

Existing Home Sales (JUL)

14:00

5.02M

5.15M

Existing Home Sales (MoM) (JUL)

14:00

-0.5%

2.4%

Euro-Zone Consumer Confidence (AUG A)

14:00

-9.1

-10.0

Leading Indicators (JUL)

14:00

0.6%

0.9%

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