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Talking Points:

- USDOLLAR Threatens Bearish Setup; Yellen Testimony in Focus

- GBP/USD at Risk for Bearish Inside-Day (Harami) as U.K. Wage Growth Disappoints

- USD/CAD Climbs to Fresh Monthly High as Bank of Canada (BoC)Talks Down Inflation Risk

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

10432.84

10446.13

10425.49

0.06

75.35%

USDOLLAR (Ticker: USDollar):

  • Dow Jones-FXCM U.S. Dollar Index climbs to a fresh monthly high of 10,446 as U.S. Producer Price Index (PPI) beats forecast, but very limited follow-through behind the initial market reaction.
  • Remains at risk for a larger correction as it clears 10,440 (78.6% Fibonacci retracement) & with the bullish break in the Relative Strength Index (RSI) gathering pace.
  • Nevertheless, will continue to look for a lower-high as the USDOLLAR retains the bearish channel from earlier this year while Fed remains reluctant to move away from its highly accommodative policy.
  • Fed Chair Janet Yellen delivers same prepared remarks to House Financial Services Committee; focus turns to the Q&A with lawmakers.

GBP/USD:

  • British Pound struggled to benefit from the 36.3K decline in U.K. Jobless Claims as wage growth disappoints.
  • Nevertheless, bullish outlook remains favorable as the ongoing improvement in the labor market paired with the threat of an asset-bubble keeps the Bank of England (BoE) on course to normalize monetary policy sooner rather than later.
  • With market participants turning their to the BoE Minutes due out on July 23, the main focus will be on the vote count as we look for a greater dissent within the Monetary Policy Committee (MPC).

USD/CAD:

  • Spikes to a fresh monthly high of 1.0793 as Bank of Canada (BoC) talks down inflation risk.
  • Nevertheless, BoC argues next move has become more neutral and continues to see a ‘soft landing’ in the housing market.
  • Looks as though we will continue to see a shift in the BoC’s guidance; still looking for a lower-high as USD/CAD retains downward trending channel from earlier this year.

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USD/CAD Marks Fresh July High Following BoC- GBP/CAD False Break?

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Read More:

Price & Time: EUR/USD Closing In On "Make or Break" Levels

EUR/USD Falls to Crucial July 2012 Trendline; GBP-crosses Resilient

USDOLLAR Daily

USD/CAD Marks Fresh July High Following BoC- GBP/CAD False Break?

Chart - Created Using FXCM Marketscope 2.0

  • Interim Resistance: 10,508 (61.8% retracement) to 10,524 (38.2% retracement)
  • Interim Support: 10,354 (Oct. low) to 10,375 (50.0& retracement)

Release

GMT

Expected

Actual

MBA Mortgage Applications (JUL 11)

11:00

--

-3.6%

Producer Price Index (MoM) (JUN)

12:30

0.2%

0.4%

Producer Price Index (YoY) (JUN)

12:30

1.9%

1.9%

Producer Price Index ex Food and Energy (MoM) (JUN)

12:30

0.2%

0.2%

Producer Price Index ex Food and Energy (YoY) (JUN)

12:30

1.7%

1.8%

Net Long-term TIC Flows (MAY)

13:00

$25.0B

$19.4B

Total Net TIC Flows (MAY)

13:00

--

$35.5B

Industrial Production (JUN)

13:15

0.3%

0.2%

Capacity Utilization (JUN)

13:15

79.3%

79.1%

Manufacturing Production (SIC) (JUN)

13:15

0.3%

0.1%

NAHB Housing Market Index (JUL)

14:00

50

Fed Chair Janet Yellen Testifies to House Committee

14:00

DOE U.S. Crude Oil Inventories (JUL 11)

14:30

-2750K

-7525K

DOE U.S. Distillate Inventory (JUL 11)

14:30

2000K

2528K

DOE U.S. Gasoline Inventories (JUL 11)

14:30

950K

171K

Fed's Richard Fisher Speaks on Monetary Policy

16:00

Federal Reserve Releases Beige Book

18:00

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