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Talking Points:

- USD/JPY Correction in Focus; Need RSI to Fall Back From Overbought Territory

- USD/CAD Marks Another Failed Attempt at 1.1000 Ahead of 2Q GDP; RSI Divergence Takes Shape

- USDOLLAR Continues to Carve Lower-Highs on Intraday Time Frames

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USD/JPY

USD/CAD Bearish RSI Divergence Raises Risk for Larger Correction

  • Need the Relative Strength Index (RSI) to fall back from overbought territory to favor a larger correction as it holds above 70 for the first time since December.
  • Will watch former resistance zone around 102.80 (38.2% retracement) to 102.90 (23.6% expansion) for near-term support.
  • The DailyFX Speculative Sentiment Index (SSI) suggests retail crowd is increasing net-short exposure on USD/JPY as the ratio now stands at -1.56.

USD/CAD

USD/CAD Bearish RSI Divergence Raises Risk for Larger Correction

  • Bearish RSI divergence continues to take shape even as the USD/CAD rallies to a fresh monthly high of 1.0996.
  • Canada’s 2Q Gross Domestic Product (GDP) report may serve as a near-term catalyst as the growth rate is expected to increase 2.7% from 1.2% in the first three-months of 2014.
  • May see a larger correction before we get a more meaningful run at 1.1000 (38.2% retracement) to 1.1020 (23.6% retracement).

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Read More:

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Gold Vulnerable As Safe-Haven Demand Ebbs, Crude Awaiting Fresh Cues

USDOLLAR

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10644.38

10660.61

10633.55

-0.05

93.03%

USD/CAD Bearish RSI Divergence Raises Risk for Larger CorrectionUSD/CAD Bearish RSI Divergence Raises Risk for Larger Correction

Chart - Created Using FXCM Marketscope 2.0

USDOLLAR(Ticker: USDollar):

  • Despite the slew of positive data, the Dow Jones-FXCM U.S. Dollar Index continues to mark lower-highs on intraday timeframes (1-hour & 30-minute).
  • Still need to see bearish RSI break to look for a gap-fill & favor larger downside correction.
  • May see former resistance around 10,555 (50.0% retracement) to 10,561 (100% expansion) act as new support.

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Release

GMT

Expected

Actual

Durable Goods Orders (JUL)

12:30

8.0%

22.6%

Durables ex Transportation (JUL)

12:30

0.5%

-0.8%

Non-Defense Capital Goods Orders ex Aircrafts (JUL)

12:30

0.2%

-0.5%

Non-Defense Capital Goods Shipments ex Aircrafts (JUL)

12:30

0.7%

1.5%

House Price Index (MoM) (JUN)

13:00

0.3%

0.4%

House Price Purchase Index (QoQ) (2Q)

13:00

3.15%

0.81%

S&P/Case-Shiller Composite-20 s.a. (MoM) (JUN)

13:00

0.00%

-0.20%

S&P/Case-Shiller Composite-20 (YoY) (JUN)

13:00

8.30%

8.10%

S&P/Case-Shiller Home Price Index (JUN)

13:00

172.84

172.33

Consumer Confidence (AUG)

14:00

89.0

92.4

Richmond Fed Manufacturing Index (AUG)

14:00

6

12

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