FX Market Outlook

From the FXWW Chatroom – • USD strengthened against 8 G10s while the Dollar Index overcame a weak start to jump higher to 98.21, gaining 0.63% amid quicker than 
expected US CPI data. 
• USD is expected to turn slightly bearish ahead of Fed decision with 
scope for stronger sell-off on disappointing US data; we anticipate a relief 
rally post-Fed announcement, which may overturn accumulated losses. 
Despite beating 97.94, the Dollar Index still faces potential rejection 
approaching 98.43 – 98.52 region. There is scope for a drop to 97.94 and 
possibly even lower to 97.34 upon rejection. 
EUR 
• EUR touched intraday high of 1.1060 on signs of improving conditions in 
Eurozone before sliding 0.55% to close at 1.0931 against a rallying 
USD. EUR closed lower against 5 G10s. 
• We stay slightly bullish on EUR in line with our expectation of a soft USD 
with scope for stronger advance on firmer Eurozone data. Rejection by 
1.1053 and then 1.1010 has left EURUSD trending at a weaker tone, but 
we expect losses to be supported by, and possibly bounced higher from, 
1.0895 that could test 1.0979 on the upside. 
GBP 
• GBP fell 0.68% to 1.5039 against a rallying USD and tumbled against 8 
G10s amid pick-up in equities and commodities that dampened refuge 
demand. 
• GBP remains slightly bullish against USD with scope for stronger 
advances on firmer UK data. Technical viewpoint suggests GBPUSD 
losses to be restricted by 1.5030, which has the potential to bounce it 
higher to 1.5099. 
JPY 
• JPY strengthened against 5 G10s but weakened 0.54% to 121.68 against 
a rallying USD. 
• We maintain a slightly bullish view on JPY against a soft USD coupled 
with likelihood of increased refuge demand. USDJPY advance remains 
blocked by 122.06, which could potentially reject it lower to 121.59 before 
breaking lower to 121.38. 
AUD 
• AUD tumbled against all G10s and weakened 0.69% to 0.7192 against 
USD, failing to see revival in bids despite firmer equities and commodities. 
• AUD remains bearish in our view against USD in anticipation risk 
aversion leading up to FOMC rate announcement. AUDUSD is likely to 
remain under pressure from 0.7201, which could push it lower to 0.7158. 
SGD 
• SGD was buoyed by firmer risk appetite in equities, rallying to beat all G10s 
and strengthened 0.18% to 1.4065 against USD. 
• We turn slightly bearish on SGD against a soft USD amid build-up in 
risk aversion ahead of FOMC announcement. USDSGD decline is likely to 
be supported by 1.4047, which could potentially bounce it higher to 1.4095. 
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