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GBP/USD 1.4700 Support Vulnerable as Short-Interest Gathers Pace
DailyFX.com -
Talking Points:
- GBP/USD Rebound to Fizzle as Bullish RSI Momentum Comes Under Pressure.
- NZD/USD Bullish Break to Benefit From Widening New Zealand Trade Surplus.
- USDOLLAR Holds Post-FOMC Low; RSI Threatens Bearish Trend Following Sticky CPI.
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GBP/USD
Chart - Created Using FXCM Marketscope 2.0
Lack of momentum to close above 1.4980-90 (38.2% retracement) may highlight a near-term topping process in GBP/USD; break of the bullish RSI momentum to favor downside targets, but need a close below 1.4700-10 (78.6% expansion) to favor a resumption of the downward trend.
Despite the weakness in the U.K. Consumer Price Index (CPI), a rebound in Retail Sales may mitigate the bearish sentiment surrounding the sterling heading into the end of March.
DailyFX Speculative Sentiment Index (SSI) ratio has narrowed to +1.52 as short-interest gains traction amongst the retail crowd.
NZD/USD
Despite the pullback from a fresh monthly high (7696), NZD/USD may continue to track higher over the next 24-hours of trade as New Zealand’s Trade Balance is expected to widen to 350M from 56M in January.
A further improvement in growth prospects may highlight a more bullish outlook for the kiwi especially as the bar remains high for the Reserve Bank of New Zealand (RBNZ) to revert back to its easing cycle.
Need a close above 0.7675(23.6% retracement) to 0.7700 (50% retracement) to favor a larger advance in NZD/USD.
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Read More:
Price & Time: Key Zone Coming Up For the Buck
Webinar: Scalps Favor Dollar Correction- EUR/USD Eyes FOMC Highs
USDOLLAR(Ticker: USDollar):
Index | Last | High | Low | Daily Change (%) | Daily Range (% of ATR) |
DJ-FXCM Dollar Index | 11954.86 | 11965.05 | 11892.26 | 0.18 | 87.40% |
Chart - Created Using FXCM Marketscope 2.0
With the Dow Jones-FXCM U.S. Dollar index holding above the low (11,886) set following the Federal Open Market Committee (FOMC) meeting, the greenback may face a larger rebound especially as the RSI threatens the bearish structures.
Despite the choppy reaction to the better-than-expected U.S. Consumer Price Index (CPI) paired with dovish rhetoric from Fed Vice-Chair Stanley Fischer, another expansion in demand for U.S. Durable Goods may support the greenback going into April.
As 11,894 (61.8% retracement) offers near-term support, next topside region of interest comes in around 11,992 (38.2% retracement).
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Release | GMT | Expected | Actual |
Consumer Price Index (MoM) (FEB) | 12:30 | 0.2% | 0.2% |
Consumer Price Index (YoY) (FEB) | 12:30 | -0.1% | 0.0% |
Consumer Price Index ex Food and Energy (MoM) (FEB) | 12:30 | 0.1% | 0.2% |
Consumer Price Index ex Food and Energy (YoY) (FEB) | 12:30 | 1.7% | 1.7% |
Consumer Price Index n.s.a. (FEB) | 12:30 | 234.728 | 234.722 |
Consumer Price Index Core s.a. (FEB) | 12:30 | 240.122 | 240.247 |
FHFA House Price Index (MoM) (JAN) | 13:00 | 0.5% | 0.3% |
Markit Purchasing Manager Index Manufacturing (MAR P) | 13:45 | 54.6 | 55.3 |
New Home Sales (FEB) | 14:00 | 464K | 539K |
New Home Sales (MoM) (FEB) | 14:00 | -3.5% | 7.8% |
Richmond Fed Manufacturing Index (MAR) | 14:00 | 3 | -8 |
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--- Written by David Song, Currency Analyst
To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.
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