Reply #10: daily dollar watch

[UpInArms]

http://quotes.ino.com/chart/?s=NYBOT_DX

Last trade 89.65 Change -0.48 (-0.53%)

Dollar Bulls Retreat As Majors Retaliate

http://www.dailyfx.com/story/dailyfx-reports/daily-technicals/7615-dollar-bulls-retreat-as-majors.html

EUR/USD – Euro bulls managed to push back the advancing greenback longs as pair once again headed above the psychologically important 1.2000 handle, a level created by the 38.2 Fib of the 1.2588-1.1639 USD rally and is further reinforced by the combination of the 20-day and 50-day SMA’s. A further advance by the dollar longs will most likely see the pair head lower target euro offers around 1.1932, a level marked by the December 28 daily high and with further advance on the part of the dollar trader seeing the pair head below 1.1900 figure and target bids around 1.1864, a level defended by the 23.6 Fib of the 1.2588-1.1639 USD rally. However in case euro bulls manage to push the pair higher, a move above 1.2100 figure will most likely see the pair advance above 1.2115, a level defended by the 50.0 Fib of the 1.2588-1.1639 USD rally. Indicators are favoring Euro longs with both positive momentum indicator and MACD treading above the zero line, while neutral oscillators give either side enough room to maneuver.

<snip>

USD/JPY – Japanese Yen longs managed to recapture some of the recently lost territory as USD/JPY staged a sharp rally sell off below 117.35, a level established by the 23.6 Fib of the 104.16-121.46 USD rally. A further move to the downside will most likely see the pair head lower and with a break below 116.00, a level defended by the January 17 daily high at 115.93, most likely seeing USD/JPY extending its decline toward the psychologically important 115.00 handle, a level protected by the 38.2 Fib of the 104.16-121.46 USD rally and 200-day SMA at 114.80. However in case yen longs fail to push the pair below 116.00, a reversal will most likely see the pair head above 117.35 and target yen offers around 118.17, a level marked by the December 30 daily high. A further move to the upside will most likely see the pair extend its gains above 119.00 figure and target offers around 119.39, a level established by the February 3 daily high. Indicators are favoring yen bulls with both negative momentum indicator and negative MACD treading below the zero line, while neutral oscillators give either side enough room to maneuver.

...more...

Dollar Mixed Ahead of Bernanke’s First FOMC Meeting as Chairman

http://www.dailyfx.com/story/dailyfx-reports/daily-fundamentals/7602-dollar-mixed-ahead-of-bernankes-first-fomc-meeting.html

US Dollar

All is quiet in US trading ahead of tomorrow’s Federal Reserve rate decision. The dollar’s performance against the majors has been mixed, as it gained strength against the Euro, Canadian, Australian and New Zealand dollars, but weakened against the British pound, Swiss Franc, and Japanese Yen. Such divergent price action suggests that the market is jittery ahead of Ben Bernanke’s first meeting as Chairman of the Federal Reserve. In previous meetings over the past decade, it was frequently rumored that Alan Greenspan would pen the statement before the committee would actually meet. We doubt that the committee would allow Bernanke to get away with same, particularly since it is his very first meeting. As for the Fed funds target rate itself, the market has fully priced in another quarter point rate hike to 4.75 percent and in fact, has even already discounted a 80 percent likelihood of 5 percent rates in May. However what happens after that is up in the air since no one has a clear grasp on where the Fed stands after 5 percent. Yet if the Fed were to really stop at 5 percent, it is logical to assume that they would give some sort of signal to the market of their intention to first slow down their pace of rate hikes. If they were to do so, this would be one of the rare opportunities for the Fed to inject a more neutral tone into the FOMC statement. With the Fed raising interest rates continuously by 375bp, a clear sign that the end is near could cause a great deal of volatility in the currency market. Tomorrow’s release is therefore extremely important and could set the tone for the weeks to come. There is one more wrinkle, which is that regardless of whether the statement is changed significantly or not, there are five central bankers scheduled to speak this week. This means that the Fed has ample opportunity to explain or clarify their decision. Furthermore, the economic calendar is extremely busy, which means that if the statement was left unchanged, the dollar could still respond to the releases in the following days as traders feel the need to rely even more heavily on the data reports to predict the Fed’s next step.

...more...