Talking Points:
- EUR/USD Retail FX Remains Net-Short Despite Growing Optimism for Greek Deal.
- GBP/USD Threatens Bearish Momentum Ahead of Key U.K. Data, BoE Governor Carney Speech.
- USDOLLAR Retains Bullish Formation Ahead of Fed’s Humphrey-Hawkins Testimony.
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EUR/USD
Chart - Created Using FXCM Marketscope 2.0
- EUR/USD may face a more meaningful relief bounce amid growing hopes for a Greek deal, but the long-term outlook remains bearish amid the divergence in the monetary policy outlook.
- European Central Bank (ECB) is likely to retain its pledge to fully-implement its quantitative easing (QE) program, but the single currency remains at risk of facing additional headwinds in the week ahead should President Mario Draghi adopt a more dovish tone this time around.
- Despite the narrowing risk of a monetary union breakup, the DailyFX Speculative Sentiment Index (SSI)shows retail crowd remains net-short EUR/USD since March 9, with the ratio coming off of recent extremes to hold at -1.86.
GBP/USD
- Positive developments coming out of the Euro-Zone, the U.K.’s largest trading partner, may keep the Bank of England (BoE) on course to normalize monetary policy; will keep a close eye on the fresh commentary from Governor Mark Carney due out next week as the central bank head continues to anticipate a stronger recovery in the second-half of 2015.
- Despite market expectations for a further slowdown in the U.K. Consumer Price Index (CPI), stickiness in the core rate of inflation paired with another expansion in wage growth may boost the appeal of the sterling as the BoE prepares households and businesses for higher borrowing-costs.
- A break of the bearish RSI momentum may produce a further advance in the days ahead amid the failed attempt to break/close below 1.5330 (78.6% retracement).
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USDOLLAR(Ticker: USDollar):
Index
|
Last
|
High
|
Low
|
Daily Change (%)
|
Daily Range (% of ATR)
|
DJ-FXCM Dollar Index
|
11955.67
|
11977.32
|
11918.25
|
-0.17
|
100.72%
|
Chart - Created Using FXCM Marketscope 2.0
- Dow Jones-FXCM U.S. Dollar may continue track higher next week amid expectations for another increase U.S. Retail Sales, while the CPI is projected to grow an annualized 0.2% after holding flat in May.
- However, the semi-annual Humphrey-Hawkins Testimony with Fed Chair Janet Yellen may dampen the appeal of the greenback should the central bank head show a greater willingness to further delay the normalization cycle.
- Nevertheless, will continue to watch the June high (12,043) as USDOLLAR retains the upward trend from mid-June, with 11,898 (50% retracement) to 11,901 (78.6% expansion) seen as near-term support.
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