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Talking Points:

- USDOLLAR Needs Less-Dovish FOMC to Breakout of Bearish Formation

- GBP/AUD Breaks Out; Need Close Above Interim Resistance (1.8130-40)

- EUR/NZD at Risk of Carving Lower-High as New Zealand 1Q GDP Picks Up

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) rallied to a fresh weekly high (10,480) as the headline reading for U.S. inflation exceeded market expectations, but the Federal Open Market Committee (FOMC) meeting may drag on the greenback should the central bank continue to cast a dovish outlook for monetary policy.

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10448.84

10464.19

10441.44

-0.10

70.82%

In light of the larger-than-expected contraction in 1Q GDP, the updated forecasts (growth, inflation & interest rate) may reflected a greater willingness to maintain the highly accommodative policy stance for an extended period of time, and the dollar may face additional headwinds throughout the summer months as Chair Janet Yellen remains in no rush to normalize monetary policy.

With that said, we will continue to look for lower-highs & lower-lows as long as the bearish RSI momentum remains intact, and will favor ‘selling bounces’ in the greenback should we get more of the same from the FOMC.

GBP/AUD Breaks Out- Topside Targets Favored on BoE Dissent

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Read More:

Price & Time: Double "Inside Days" in USD/JPY

GBPNZD Weekly Opening Range Play- 1.96 Resistance in Focus

USDOLLAR Daily

GBP/AUD Breaks Out- Topside Targets Favored on BoE Dissent

Chart - Created Using FXCM Marketscope 2.0

  • Downward Trending Channel in Focus Amid Bearish RSI Momentum
  • Interim Resistance: 10,602 (38.2 retracement) to 10,615 (78.6 expansion)
  • Interim Support: 10,354 to 10,375 (50.0 retracement)

Release

GMT

Expected

Actual

Consumer Price Index (MoM) (MAY)

12:30

0.2%

0.4%

Consumer Price Index (YoY) (MAY)

12:30

2.0%

2.1%

Consumer Price Index ex Food & Energy (MoM) (MAY)

12:30

0.2%

0.3%

Consumer Price Index ex Food & Energy (YoY) (MAY)

12:30

1.9%

2.0%

Consumer Price Index n.s.a. (MAY)

12:30

237.612

237.900

Consumer Price Index Core Index s.a. (MAY)

12:30

237.592

237.776

Housing Starts (MAY)

12:30

1030K

1001K

Housing Starts (MoM) (MAY)

12:30

-3.9%

-6.5%

Building Permits (MAY)

12:30

1050K

991K

Building Permits (MoM) (MAY)

12:30

-0.9%

-6.4%

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