GBP/USD Retail Positioning Hits Extremes Ahead Of NFP, BoE Meeting
Video Length: 00:08:42
Talking Points:
- GBP/USD Retail Positioning at Extremes Following Failed Test of May Low (1.5088).
- AUD/USD Rebound Stalls at Former Support; Downside Targets in Focus Ahead of RBA Meeting.
- USDOLLAR Fails to Retain Opening Weekly Range as ISM Manufacturing Disappoints.
GBP/USD
Chart - Created Using FXCM Marketscope 2.0
- GBP/USD remains at risk for a further loss over the near to medium-term as the Relative Strength Index (RSI) retains the downward trend from back in May; need a break/close below 1.5088 (May low) to 1.5090 (61.8% retracement) to favor a further decline.
- However, with growing speculation for a greater dissent at the Bank of England’s (BoE) October 8 interest rate decision, may see GBP/USD consolidate ahead of the policy meeting amid the tightening race with the Federal Reserve to normalize monetary policy.
- DailyFX Speculative Sentiment Index (SSI)shows retail crowd remains net-long GBP/USD since August 21, but the ratio is hitting recent extremes as it climbs to +3.11, with 76% of traders long.
AUD/USD
- AUD/USD struggles to retain the gains following positive data prints out of China – Australia’s largest trading partner – with the pair pulling back from former support around 0.7080 (38.2% expansion) to 0.7090 (78.6% retracement).
- Even though the Reserve Bank of Australia (RBA) is widely expected to keep the benchmark interest rate at 2.00% at the October 6 meeting, dovish language accompanied by a toughened verbal intervention on the local currency may spark a resumption of the long-term bearish trend for AUD/USD.
- As AUD/USD struggling to push back above former support, will continue to keep a close eye on the narrow range as the pair continues to close above 0.6950 (161.8% expansion) to 0.6970 (50% expansion).
USDOLLAR (Ticker: USDollar):
Index |
Last |
High |
Low |
Daily Change (%) |
Daily Range (% of ATR) |
DJ-FXCM Dollar Index |
12066.40 |
12082.08 |
12042.62 |
-0.06 |
81.34% |
Chart - Created Using FXCM Marketscope 2.0
- The Dow Jones-FXCM U.S. Dollar slips to a fresh weekly low ahead of the Non-Farm Payrolls (NFP) report amid the ongoing mixed batch of data coming out of the U.S. economy; still waiting for a break of the bearish formation on the RSI to favor a resumption of the long-term bull trend.
- Will keep close eye on the fresh comments from San Francisco Fed President John Williams as he serves as a voting-member on the FOMC; will we see a growing dissent at the October 28 interest rate decision?
- Despite the failure to retain the weekly opening range, closing price above 12,082 (61.8% expansion) should favor a move into 12,162 (April high) to 12,176 (78.6% expansion).