USDOLLAR Outlook Mired by Downside Inflation Risk- CPI in Focus

Posted By : MRG Mega Berjangka, Nov 20, 2014 – 03:35

DailyFX.com -

Talking Points:

- USDOLLAR Fails to Break Monthly Opening Range as FOMC Highlights Downside Risk for Inflation.

- USD/JPY Extends Advance on Dovish BoJ- RSI Resistance in Focus.

- GBP/USD Rebounds from Fresh Monthly Low as BoE Sees Greater Risk for Inflation.

USDOLLAR(Ticker: USDollar):

Index	Last	High	Low	Daily Change (%)	Daily Range (% of ATR)
DJ-FXCM Dollar Index	11316.23	11320.06	11282.39	0.32	60.45%

Chart - Created Using FXCM Marketscope 2.0

The Dow Jones-FXCM U.S. Dollar Index may hold the monthly opening range as the Federal Open Market Committee (FOMC) highlights the downside risk for inflation; still waiting for a bullish break in RSI for conviction/confirmation for another leg higher.
With the U.S. Consumer Price Index (CPI) expected to slow to an annualized 1.6% in October, a further downtick in the headline reading may generate a larger pullback in USDOLLAR as the Fed remains in no rush to normalize monetary policy.
Lack of momentum to close above 11,312 (78.6% retracement) and 11,351 (78.6% expansion) raises the risk for a larger correction; will watch former resistance around 11,120 (161.8% expansion) to 11,138 (61.8% expansion) for new support.

Join DailyFX on Demand for Real-Time SSI Updates!

Release	GMT	Expected	Actual
Housing Starts (OCT)	13:30	1025K	1009K
Housing Starts (MoM) (OCT)	13:30	0.8%	-2.8K
Building Permits (OCT)	13:30	1040K	1080K
Building Permits (MoM) (OCT)	13:30	0.9%	4.8%
Federal Open Market Committee Meeting Minutes	19:00	--	--

Click Here for the DailyFX Calendar

USD/JPY

Chart - Created Using FXCM Marketscope 2.0

USD/JPY extends advance as Bank of Japan (BoJ) Governor Haruhiko Kuroda sounds less confident in achieving the 2% target for inflation; .
May see a further advance in USD/JPY as the Relative Strength Index (RSI) pushes deeper into overbought territory, but will keep a close eye on the 87 figure for resistance on the oscillator.
DailyFX Speculative Sentiment Index (SSI) shows retail crowd is net-short USD/JPY since November 12, with the ratio sitting at -1.41.

GBP/USD

GBP/USD rebounds from a fresh monthly low (1.5588) even though the Bank of England (BoE) Minutes showed another 7-2 split as a growing number of central bank officials highlight a risk of overshooting the 2% target for inflation.
With U.K. Retail Sales projected to rebound 0.3% in October, positive data prints should heighten the appeal of the sterling as the BoE remains on course to normalize monetary policy in 2015.
As GBP/USD continues to hold above 1.5540 (78.6% retracement) to 1.5550 (61.8% expansion), will watch former support around 1.5890 (61.8% retracement) to 1.5900 (50% expansion) for new resistance.

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

MRG MEGA BERJANGKA