DailyFX.com -

Talking Points:

- EUR/USD Risks Larger Rebound as Retail FX Turns Net-Short; RSI in Focus.

- AUD/USD Oversold Ahead of RBA Amid Growing Bets for Rate Cut.

- USDOLLAR to Face Advance 4Q Gross Domestic Product (GDP) Report.

For more updates, sign up for David's e-mail distribution list.

EUR/USD

EUR/USD Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • Even though the long-term outlook for EUR/USD remains bearish, the pair may face a larger rebound as the Relative Strength Index (RSI) comes off of oversold territory.
  • However, the Euro-Zone’s Consumer Price Index (CPI) may dampen the appeal of the single currency as the headline reading for inflation is expected to contract 0.5% in January.
  • DailyFX Speculative Sentiment Index (SSI) appears to be showing a more dynamic shift in FX positioning as the retail crowd is net-short EUR/USD, with the ratio currently sitting at -1.94.

AUD/USD

AUD/USD Daily Chart
  • AUD/USD remains at risk for a further decline ahead of the Reserve Bank of Australia (RBA) policy meeting on February 2 as the RSI pushes deeper into oversold territory.
  • Seeing growing expectations for a RBA rate cut amid the global easing cycle; according to a Bloomberg survey, 20 of the 23 economists polled see Governor Glenn Stevens keeping the benchmark interest rate on hold at 2.50%.
  • Next downside target comes in around 0.7680 (161.8% expansion) to 0.7720 (161.8% expansion).

Join DailyFX on Demand for Real-Time SSI Updates Across the Majors!

Read More:

Price & Time: Kiwi Breakdown Continues

GBPAUD Weekly Opening Range Setup- Long Scalps at Risk Sub-1.92

USDOLLAR(Ticker: USDollar):

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

11873.06

11874.09

11799.3

0.57

110.36%

EUR/USD Rebound in Focus as Retail FX Crowd Turns Net-ShortUSDOLLAR Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • Despite the limited market reaction to the U.S. data prints from earlier this morning, Dow Jones-FXCM U.S. Dollar may appreciate further as the RSI pushes back above 70.
  • The advance 4Q Gross Domestic Product (GDP) report may set the tone for the February trade as the growth rate is expected to advance an annualized 3.0% after expanding 5.0% during the three-months through September.
  • As USDOLLAR tests the monthly opening range, the next topside objective comes in around 11,901 (78.6% expansion).

Join DailyFX on Demand for Real-Time SSI Updates!

Release

GMT

Expected

Actual

Initial Jobless Claims (JAN 24)

13:30

300K

265K

Continuing Claims (JAN 17)

13:30

2405K

2385K

Pending Home Sales (MoM) (DEC)

15:00

0.5%

-3.7%

Pending Home Sales n.s.a. (YoY) (DEC)

15:00

10.8%

8.5%

Click Here for the DailyFX Calendar

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

To be added to David's e-mail distribution list, please follow this link.

Trade Alongsidethe DailyFX Team on DailyFX on Demand

Looking to use the DailyFX Trade Signals LIVE? Check out Mirror Trader.

New to FX? Watch this Video

Join us to discuss the outlook for the major currencies on the DailyFXForums

http://www.dailyfx.com/analyst_on_demand?CMP-SFS-%5bcode%5d


original source